Is it necessarily a bad thing for religious to shrink and decline? I mean, it’s not like holiness and contact with God isn’t available outside of a monastery or convent, or that the Church herself was shrinking (though in some sectors and communions, it is).
It depends on the religious order:
FSSP- No; bad thing
FOTI -No; bad thing
Jesuits - Yes; good thing
Religious communities have been extremely important in the life of the Church since the 4th century. They replicate the mission of our Lord: disciples gather around a charismatic leader and dedicating their lives to the mission he defines. Just think of Francis and the way that his example has been followed, however imperfectly, since his time. In many cases, the original chrism is lost, the order decays and dissolves. But new ones keep popping up. In the Protestant world the result is a new denomination, but the unity found in the Catholic Church is lacking, although there is more there than what appears at first glance.
At the local abbey, the numbers of seminarians keep growing.