Lab disappearance is follow-the-crowd mentality.

People believe they can't make money so they bail. The next guy over sees that and bails (before he loses out).

Wal-mart and Costco put millions of mom and pop minilabs out of business by underpricing them and then decide they can't "justify" keeping their services running. So they bail.

An inventive photo lab could make lots of money in both digital and film services but, for a lot of people, a little work is too much work. They like it better when they just open the doors and the business floods in. When the flood stops they aren't happy with a flowing stream, they go searching for a new flood.

It was like this with the video rentals and then Blockbuster came in and killed them off. Now Blockbuster is busted and the mom and pop video stores are long gone.

I see people begging for reasonable E6, BW and medium format services but they are almost non-existent.

Film scanning services (fair price and outstanding quality) are also a money maker.

But, business people are not imaginative. They just want to read Entrepreneur magazine and follow the crowd.