If I had a nickel for every MUD that was totally awesome ten years ago, but only has 1/3rd its old playerbase and isn't nearly as fun because of it, I'd have enough cash to pay people to play full-time. The age of MUDs has passed, sadly. It's not where the new blood is going these days, and all we have is jaded oldbies, people with their age-old friend groups, or ten-year junkies who need a fix.
Depressing, really. But hell, the age of MUDs started its decline around fifteen years ago...as soon as every developer with an awesome idea realized they could actually pull it off and create their game, and the rate of new MUDs opening was higher than the rate of players entering the genre. Even in 2005, new MUDs seemed to be opening faster than old ones were shutting down, but more players were leaving than were joining.
Man...back in the old days, MUDs were where it was all at. You started life on some AOL roleplaying group, or playing Ultima (like, Ultima II, not UO or anything). Then you found the internet, maybe in college or something, and you took it to the next level. Maybe you had a specific fandom, like Shadowrun or W:tA or Discworld or Elfquest or Pern or furry and went poking around and presto, there's a game for it, ready and waiting. Then you poked a couple friends and pulled them in, because these games were all shiny and new--who knew what wonders this Internet contained?
But we're jaded, now. We have other games. When Doom was king, you couldn't even play it over the Internet proper, it was more of a dial-to-your-foe thing. Internet FPSes kicked it off, since now there were other games to play online. While MU*s were more interactive than Usenet, the rise of instant messengers slowly eroded that advantage. MMOs, browser games, these things provided a new way for students to blow hours on end online... The new blood stopped coming in. When a roleplayer was introduced to the Internet for the first time, MU*s weren't one of the first things they discovered anymore. Soon, the generation of text-adventure gamers was grown up, too; they might not all have stayed, but at least they came in the door. The old blood grew up, which didn't take them out of the community--it just reduced the number of people they could recruit; once you're older, you become set in your hobbies. Your friends have no more time to join you in new places.
Oh yes, WoW did its part. But MMOs simply helped slow the number of new players. With no new players and the number of games ever-rising, though, fragmentation is what is finally killing MUDs. The old players are too set in their ways to move to a fuller MUD, the new players are distributed too widely...no game will be as full as it was designed to be ever again, and we can't reclaim the games we had of our youth. Like a roaring river, MUDs change from day to day...You never quite connect to the same site twice.
Do not try, in desperation, to return to the old days. Mourn them, and accept their fate.