Because the skillset is there, and it's not obsolete...so somehow they should be able to make a living with it. But what is the way?
I think what you're seeing is a natural consequence of a maturing market and technology. The same thing happened with automobiles and radio. There used to be dozens of car companies and probably several dozen radio manufacturers.
In the early days there was a big opportunity to make your mark on the industry because best practices and industry standards don't yet exist. Those that got in early got the opportunity to shape the technologies and industries into what their own personal vision of the Age of Wireless was. Those that followed (in most cases) either had to have a breakthrough idea (and successfully market it) - or fall into line with where the trends were going.
The advantage is this brings standards to an industry - which frequently benefits the consumer. The downside is it creates barriers to entry for innovation - and tends to favor the biggest players.
In places where there isn't a universally agreed upon set of industry standards (eg: tablet PCs, smartphones, ebook readers) there a great deal of confusion and infighting as each player tries to impose their vision on the rest of the world. And coincidentally pocket all the money in the process.
There was a time when business competition was confined to marketing and technical innovation. Nowadays, it's legal subterfuge and chicanery - with (often groundless) patent litigation being the tool of choice for fighting the battle - all with the intent of eliminating competition in the courtroom before the customer gets a chance to weigh in on it.
So what's the future look like for an indy software developer? I think wraith hit it on the head with his comment above. And as the lion's share of market is gradually moved into various licensing silos, proprietary formats, and walled-garden distribution mechanisms by the likes of Microsoft and Apple, it's only a matter of time before most developers are either forced to go with them - or quit the field.
This won't happen overnight. But right now, it looks like the die is cast and the Golden Age of Open Standards and Personal Computing
is heading into the realm of history and legend. Major tech businesses, after befitting from the huge market created by open standards, are now flagrantly opposed to 'open' anything. And they are spending their legal and political influence money to make sure whatever openness there is comes to an end as quickly as possible.
And the politicians and governments of the supposed "free world" are not opposed to this happening. Open standards in personal computing, and unrestricted global communication, are becoming viewed as a threat
- either to national security in the form of cyber-terrorism and criminal actions - or to vested political and business interests in the form of unrestricted communications. Maybe the governments can't find a 100% effective or legal way to stamp out something like Wikileaks - but they certainly can
put a stranglehold on the communications pipeline such that it will no longer be possible to evade government censorship over the main data networks. Or get the word out to the entire planet in a quick and efficient manner.
I wish software developers the best of luck. Because as things stand right now, the Powers That Be
very much want the Internet as we know it, along with the classic personal computer, to be seriously gone.
Once everybody is safely corralled into heavily monitored and remotely controlled tablet computing and smart phone platforms, the governments will breath a collective sigh of relief. After which it will be back to business as usual without any of the 'rabble' rocking the boat, asking embarrassing questions, or posting things those in power would rather not have us see.
And so far at least, it looks like the bulk of the general public no longer cares.