Lego has more cash and clout to get more desirable IPs with less strict restrictions of course.
I think the real reason for the decline of Meccano/Erector is that it is more fiddly than Lego is. I almost wrote difficult but I don't think that's quite the right word -- there is a lot more freedom in construction with makes assembly, even following instructions, trickier.
Meccano/Erector (or the Czech Merkur) are all metal, die cut/stamped out of sheet metal and using actual screws. Moreover, the French factory being closed was practically hand-making it, it was not at all automated. So as economically inefficient and expensive as it gets.
Also these types of construction sets just aren't as amenable to the usual licensed IP - you can't really make Batman or Star Wars figurines out of sheet metal. These sets don't really have a history of mixing a lot of plastic parts with the usual metal bits. It doesn't work well together and also the result looks a bit weird with all those holes. In addition, the types of shapes you can make out of it are more limited due to the way it is manufactured (or it would get very expensive if custom bent/shaped parts were required). Whereas for Lego it is just another mold being used so they have a lot more flexibility.
Meccano/Erector or Merkur are really most suitable for what they were originally modeled after and designed for - mechanical machines, engines, contraptions, etc. Lot of real-world machines were prototyped with Merkur - e.g. the first contact lenses were made by their inventor using a Merkur machine.
Sadly those types of toys are not as much in vogue today - or need to be full of flashy electronics, connected to a phone and ideally licensed from Disney to be able to sell them ...
Even Kinder Surprise toys are now just QR-coded pointers to app.
Multiple commenters in this thread wrote of unexpectedly plastic Meccano sets they purchased in the last few years (and the problems involved).
Doing anything new is very hard without advanced tech. You still need fundamentals, but those are really hard to market, because from the outside it just looks like "All relevant modern engineering is done with computers and that's the most important part", the non-computer parts kind of blend into the background.
Maybe someone should do a book celebrating the few low tech cool things people are doing. There's probably still undiscovered possibilities with mechanical stuff!