I think there is a pretty simple answer. There is more competition for our time and entertainment dollar in 2012 than there was in 1992 or 2002. High-def TV's with 500 stations, Netflix, social media and video games are just some examples. Attendance is down in college basketball - of course there are some Louisville's and Indiana's - but it's tough to get people most places in the seats without a big matchup.
The perfect example is the NFL and how people consume Red Zone, Fantasy and Gambling versus the past where they were fans of a team. I used to love going to 3-4 Giants games a year. I've been to 1 in the past few seasons - I quite prefer Red Zone and gambling to the sum total of effort it takes to go to New Jersey for a game that may suck.
People have become custom to big events, here and elsewhere. This is why Syracuse at Gample last year had people buying tickets for hundreds but you'd be lucky to scalp the entire XL package for $100 this year.
Last night's UConn game provided zero entertainment value. It was a glorified pick up game. The only reason to attend would be a sense of obligation. In the past I have attended these games for that very reason. Now I have competing obligations, and UMES is just too pointless and boring to worry about. I wouldn't have gone to that game if they paid me $50.
You've discussed the concepts competition for fans attention and alternative ways of viewing the same venue which are easier and in many ways more comfortable to view games as reasons for drops in attendance. This is a really well thought out an in depth post! A lot of this has merit imo.
There are a couple of other points I would like to offer. One is saturation based on the biological concept of accommodation (reduced awareness of a stimuli). At some point the excitement level gets reduced when things are overexposed. If someone has the opportunity to eat hamburgers every day, ultimately most people take the hamburger for granted, and will consume the meat without paying much attention to it. But the first few times they tasted it, it occupied their awareness strongly. Take the same individual that has become accommodated to the experience, put him in an environment where hamburgers are not readily available, reintroduce him back to his original environment, and that individual will desire the hamburger once again, experiencing it in the same pleasurable manner that occurred when he was first introduced to the hamburger.
People are overexposed to sports. So the degree of pleasure, excitement, newness gets reduced with ever larger number of events. This is part of the process. But not everyone watches a wide body of sports or even a wide selection within one sport. If people isolate themselves to one team, and that team is successful over long periods of time, the luster wears off with each successful event. Certainly people prefer winning to losing. But accommodation kicks in. That is part of the process that has occurred with UConn bb. Only the most exciting venues are able to bring fans to personally view games. The weaker match ups are the quickest to become accommodated.
One other factor that is important. There is a bell shaped curve regarding accommodation and that bell shaped curve will be different for each one of us depending on the stimuli we are discussing. Certain people will never get tired of hamburger. They will eat it with the same passion whether it is their first or their 1000th. This group is smaller in numbers but it exists. The same applies for fans of a particular sport. These are your rabid fans. They are a subsegment of your entire population of fans. They are the fans who will go to see a Cubs game even though it is overcast and drizzling. They will get seasons tickets to Whalers games even though they are likely to be in the bottom of the league.
They are the heart and soul of every team. It is my contention that the policy of increasing the $$ amounts to gain access to better seats, helped the university revenue stream at the expense of pushing the rabid fan out of the arenas and into their homes. It was a trade off with short term economic benefits at the expense of keeping arenas well attended. We are seeing the effects of that policy. Attendance at arenas is very important to create an atmosphere of excitement which has the advantage of giving teams a home field advantage and attracting better players to want to play for that team. Certainly the attendance would decrease anyways because of the points you made and the affect accommodation has on attendance. But imo, the UConn leaders accelerated the problem with this policy.