The Lan Party is pretty much dead - people can hang on-line instead. This isn't to say friends don't get together and have their own small garage lans, but there really is no 'in-between' sized events anymore -- it's you and your friends in a basement or garage, or it's huge massively sponsored events that have multiple incentives to get people to come. For anything in between it cost too much to run one and there are many other complexities that compound the issue further. Even geographics play a huge role.
If you aren't large enough to get huge sponsors, then nobody wants to go to your over-priced event to 'just have fun'. If there is no incentive to pack up your shit, dedicate a few days of your time, and spend money on travel, food and in some cases accomodation - then nobody will attend and the event loses steam, fast. FYI : When I say over-priced, I don't refer to the cost to get a seat alone, I mean the cost to get a seat + everything else that will rape your wallet as well like I mentioned above.
Other factors are previous generation lan gamers have grown up and tend to dedicate their time to other things more important in their lives and get by just fine gaming on-line when they have the chance. The new generation of younger gamers are mostly console couch bums holding gay-ass controllers that look like Fisher-Price designed them.
Sad, but true.