I'm a Holga retailer and an enthusiastic Holga photographer. We just hosted Holga's 30th anniversary exhibition at our shop in San Francisco. The Holga has done phenomenally well for a kind-of-hard-to-use film camera. It went though a period of being very fashionable - lots of people bought Holgas and never used them - but now the fad has passed. We still sell plenty of Holgas, but I am sure that worldwide sales have flattened or decreased slightly over the past few years.
I think Mr. Lee is not talking so much about film cameras in general as much as the reality of his own business. Holga sales have flattened after a period of strong growth, so he's going to have to find another product with a wider appeal if he wants his company to grow. They have recently introduced some iphone add-ons, and it wouldn't surprise me if they made a digital Holga. That's what I would do.
Regarding film cameras and film sales in general, in our shop we are seeing steady and growing sales, especially with people in their 20s and 30s. It's not a lot of business, to be sure, but it's alive and kicking.