The “bread and butter” work that kept the typical automotive machine shop going...... is almost non-existent anymore.
Rebuilding heads and the machine work associated with engine rebuilding is now a tiny fraction of what it was 25 years ago.
Automobile engines often outlast the cars they reside in, in many parts of the country these days.
And the motors are now quite a bit more complicated than they used to be, and are more expensive to rebuild ....... to where the cost of doing so is well beyond what the vehicle is worth in many cases.
It’s usually way cheaper to find a used motor and just swap it out.

Add in that many of these late model engines require machining processes that are beyond the capabilities of a lot of 30-40 year old machines that many of those old school shops had, and the cost for new machinery is beyond the reach of those shops, especially when you consider the return on investment with the shrinking market for the services.

There were just more shops than the current market can bear.