Simple answer is it can't compete. It's a generational thing. What was exciting to us is boring to the next generation and even more boring to the next.
How many kids do you see building balsa airplanes or even plastic models these days? Those things were HUGE when I was a kid.
Stern is doing ok because of collectors and the fact that the themes (movies, etc.) might draw kids in for a couple games.

There's an arcade at Rehoboth beach, DE that always has an amazing wall of pins. All new Sterns and many of the top rated Williams games. Usually all in top notch condition. I forget the name of it, but I spend my days in there while my wife gets fried by the sun on the beach.
The most amazing thing is nobody EVER plays them. Nobody but me and a few other older guys. I have never had to wait to play a game and I always look forward to going there to check out the newest Sterns. Not to jinx it, but every year I wonder why the owner even bothers with them. Anybody under 20 passes right by them like they're passing by a pile of garbage.