It was a passing phase, a fad. NFT artists & creators made a lot of money. Lots of people got fleeced for a lot of money that they will never make back. NFTs are useless, they offer nothing, it’s just a massive scam. Similar to the ICO craze of 2017, NFTs were the trap of the last bull run. Be careful & don’t be a sheep.
We can say the same about "meme" coins. Yet, people continue to buy them with the hopes of getting rich quick. Demand for NFTs has declined, but not to a point where it has completely disappeared. Consider how 1-2 years ago, NFTs gained traction on the Bitcoin blockchain through "Ordinals inscriptions". Some people are still buying and holding these thinking they will turn a profit in the long run.
What will ultimately "kill" NFTs will be increased regulatory scrutiny. That's what led to the downfall of ICOs back in 2017. Once governments start to regulate NFTs, it will be game over for the industry for good. Perhaps, NFT marketplaces will be forced to comply with KYC/AML rules to help track down NFT creators (and avoid money laundering/tax evasion)? You can bet popular platforms like OpenSea and Magic Eden will do this. Especially when they're not truly-decentralized. It's an uncertain world out there, so we should expect the worse.