I also think the OHS/WHS bans on the public entering the stable area has made it harder to get new people involved. Nowadays you can't take potential new owners and their kids down to the stables to pat your horse and meet the trainer and driver. Truth is you are a million times more likely to be injured on the drive to the track than in the stabling area.
I know it was hands on contact with the horses and meeting some of the characters involved in the sport that got me hooked.
The lack of any undercover spectator seating at Melton and a shortage of inside sitting areas also ads to the issue.