What I also observe is, that arab speakers sometimes write with the latin alphabet using characters like "3" do represent some missing phonemes. Urdu surely is not alone, and having a proper nastaliq rendering on all devices might not solve the bigger issue here.
Could you elaborate a bit on nastaliq and how/whether it does represent Urdu's phonemes properly? Are people considering Devangari as an alternative?
Is that really true, though? The reason writing styles, fonts, heck even languages are for myriad reasons, but the intersection of technology and change (I don't just mean modern technology, but even the invention of the printing press itself, shipping and cross-continent contact, modernisation over the past few centuries) seems to me to be the dominant reason why they disappear. Perhaps this is just another example of that.
Of course, you can make the argument that because of technology now, there is no reason for a writing style to die off, and I wouldn't disagree! The question remains, though, is that whether it's worth it outside of the digitization of languages for archive purposes, if it's not used widely as-is. It's certainly interesting to think about, thanks for posting!