I am a semi-active Pokemon Go player in the SF Bay Area and I can tell it's definitely died down over the last few weeks. In the beginning, every Friday/Saturday/Sunday night, the whole downtown area would be lured up and people would be out mingling and catching pokemon in the local park. This past weekend, there were only a few lures and a few diehards milling around the park. There's a few dynamics at play based on personal experience:

1) Many players don't care about the gym battling system and just wanted to "collect" Pokemon. Once you've collected most of the ones in your area, you're going to get bored catching the same pidgeys, weedles, and rats/bats. My SO and I have gone to different areas to catch other Pokemon but you just need to go a few times and now we both have "most" of the common Pokemon. We're not hardcore enough to want to spend more time hunting the last few missing in our deck.

2) The lack of support and response from Niantic when the game was badly broken turned off a lot of casual players. Hardcore players will forgive them but casual players especially on iOS expect a lot more polish and "it just works" from a top selling game. I wonder how much of a fit Nintendo threw when this happened given they are a partial owner/investor in "The Pokemon Company".

3) The gym battling system mechanics are not great. You basically can throw bodies at a gym until you knock them down. There's no P2P battling which would make it more exciting since the gym AI is predictable in their attack patterns and most players know the dodge, attack, dodge routine now. The whole premise is to take down a gym, revive your Pokemon, collect potions/revives, do it all over again.