Yes, true, but in the 1800s, literacy rates were extremely low as well. Most people didn't read then either. By the time literacy improved, we already had competing media like radio, television, etc. But books still won because they were a different form of media. And most "popular" books since the invention of the printing press have usually been garbage, like guides on how to burn witches properly, etc. It wasn't like people were reading Dostoevsky in masses then and don't do it now. It was always a small minority of people that cared about actual literature.

I think it's also more about active vrs passive consumption these days. People these days consume media mostly passively (watch whatever is on a streaming service, hear a podcast/audiobook while driving, let AI summarize an article instead of reading it), whereas that wasn't really possible previously (go to a theater to watch a movie, actually read stuff with attention, etc.).

So yes, people might be reading less, but I don't think it's some massive fall in literacy as people make it out to be. We're much more busy and don't have time to actually sit down and actively focus on media consumption these days as well (assuming you're employed in a somewhat capitalism-based system).