What you are talking about is the new paradigm of consuming music, but not high end audio. Let's look at music reproduction and high end audio from a 50,000 foot level and a different perspective.
People are fascinated with innovation, and rightly so. But by innovation they mean technology innovation that result in radical breakthroughs ... But looking at things from a broader perspective , in terms of culture, psychology, emotions, and sociology standpoint- along with the technological changes, people don't buy products, but they buy meanings and "why's" behind the products, functions that give a purpose and a sense of meaning - features be damned. In many cases, customers have not communicated these "market needs" but instead were waiting all along for someone to create the product.
But there has been very little purposeful innovation of meanings on part of businesses and individuals. Looking at changes in meanings, however, shows that they do change , even radically. Look at Whole Foods Market, a super-market which changed the meaning of nutrition from thinking of some super skinny, self- denying bit h, shopping for fish oil pills and vitamins in a small, run -down strip mall store to an experience of shopping in a beautiful store and enjoying healthy and delicious food. In our hobby, of course , Apple is the famous for its innovations. Apple understood that the home TV and stereo system was no longer the "fireplace" in the household. As you say, the world changed and people did not sit around the house. Instead they are busy and mobile, constantly multitasking and getting entertained, whether sitting on the can in some train station or walking down the street. Prior to the move to the mobile society, Bang Olufsen, a GREAT European company, was the primary innovator of meanings in our hobby. They saw an opportunity to innovate the meaning of the hi fidelity system in the home as one of big ugly boxes of electronics and huge speakers taking up precious living space to sleek modern furniture that enhanced once life visually and (somewhat - to us snobs) aurally, as people sat next to their new "fireplace" and relaxed. Of course, now people listen to mp3 format and experience music in ways that allows people to buy, share, produce, etc., via mobile devices and computers.
In the ultra high end corner of the hifi hobby, the main innovation in meanings came from the audio magazines. Gordon Holt invented the concept of subjective listening of Hifi gear and created an audiophile vocabulary to discuss these subjective differences. Harry Pearson's innovation was that Hifi should sound like real music. Interestingly, the guy who took over his job, intellectually, Jon Valin, tried changing Pearson’s innovation from reproduction of a concert in the home to Hifi being a clean, cold, precise instrument. To some, for sure, high end audio is about this, for sure. For most of us, however, great audio is visceral. Like real music, it moves people and invokes their innermost feelings and emotions. But then, start your own magazine to cater to that analytic thinking about music, and don't ruin a great thing! So I find it kind of odd that a TAS author, out of all people is whining about the death of hi end audio in the USA.