And yet the German groups started a slow but steady decline after their peak in 2001: http://usenet.dex.de/de.ALL.html
I was active in the German Usenet back then and still remember that between around 2001 and 2005 the spammers and trolls took over and destoyed one group after another until they were completely unusable. I also mostly quit around maybe 2005.
So I highly doubt that Usenet would have continued to work if ISPs had just continued support it. Usenet only worked as long as everyboy was nice to each other, it would never work today without much better moderation protocols and tools.
Had peering been more on demand, rather than a firehouse, maybe people would have kept them longer.
I for a while worked on an aggressively caching NNTP server as an option because of the costs involved.
YouTube appeared in 2005 and was losing VAST amounts of money before Google bought them out. So, even in 2005, Usenet probably was still too expensive.
Everything moved to the web, and Usenet clients were hit or miss. Neither Windows nor Mac came packaged with a client for it, so it certainly wasn't easily discoverable for people who joined the internet later. They probably never even knew it existed.
ISPs became client-less after broadband became widespread. ISPs didn't want to write or provide software, they just wanted to provide data over basic cable/DSL. Even AOL instant messenger eventually faded, as it never really adapted itself to a non desktop centric web.
Spam was the issue – there were extensions and initiatives to combat it, but it was a losing battle. It was a major cultural loss – Reddit can at its best approach it, but not replace what existed in the early nineties.
Usenet faded because it wasn't monetizable, outside of subscription based binary providers (who were in large part turning around and pumping that money into the legal defense funds, because they were primarily servicing the swashbuckling community).
The platforms that are actively used are codependent. They demand you use them. They send you emails when you haven't logged in in awhile. They foment opposition just to keep you engaged, so you'll view their ads.
Usenet, on the other hand, lets you use it, if you feel like it, assuming you know where to look.
The only sort of people who would use Usenet would be those that make decisions for themselves, rather than doing what the marketers tell them. It never stood a chance against this sort of opposition.
But let's take something else from the same era and provide a comparison for the average user: yahoo.com. You typed it into the browser, and you were instantly presented with several hundred interesting links. No config necessary, just click and go. The UX needed to be that simple.
Actually discovering good channels on Usenet took time and investment. As opposed to Reddit, for example, which used upvotes and decay based algorithms (also, see HN) to make fresh subreddits discoverable on the main feed.
That’s why I had to retire my company’s internal NNTP setup - because at some point, too many users were just using it through the web and email gateway that it was cumbersome and made no senses to keep it running.
I ran my own news server in the 90's, receiving about a dozen groups over dialup with a UUCP feed.