Many angles to see this from. My main claim is that a lot of these are Sepharadi youth who are third generation in the country and barely coming to shul on Friday night if at all. I see this in all the Sepharadi shuls in the city. The parents are srugim but the kids have mostly exchanged the kipa sruga they wore in elementary school for a crumpled up back pocket one OR a black one from the Haredi yeshiva they went to. We are now seeing the effect of the Shas split from the Mafdal a generation ago. The young ones less identify themselves with the still mostly Ashkenazi dati-leumi.
Even though they are much smaller communities with less impact, this happened to the 2nd generation Teimanim a generation ago, and now also a problem in the Ethiopian community.
I do not deny it is not an issue in the Ashkenazi DL sector, but I have not been able to find more than one family in which I know 2/4 kids went OTD.
Given all that, it would seem that the core DL community, lite to Hardal, is still chugging along and multiplying.