Just look at Boxing. Back in the '70s, everyone used to watch and talk about every major bout. Then it turned into a cable-only affair and it started a nosedive. Now that it is purely pay-per-view, I don't know anyone into boxing anymore.
You make a good point. However, "cable" TV for the masses may not be far off. As soon as cable and internet over power lines is perfected, "broadcast" will go away....
We already see the rumblings of this with the TiVo, video iPod and podcasting. Instead of the lowest common denominator crap that we get with broadcasting, we will get narrowcasting to the extreme. If you are a ski nut, there will be channels dedicated entirely to skiing. If you are a weather weenie and can't get enough of studying the GFS models and isobars, you will soon have endless amounts of this nerdy stuff at your fingertips and you'll never have to suffer with "The Weather Channel" again.
All the major technology companies see this tidal wave of change coming and they are investing heavily in set-top boxes and computers that will filter this immense amount of data and deliver to you the content that you really want. Microsoft. Apple. Google. Yahoo! All these companies and many more will be the new media conglomerates.
You will soon have virtually all media ever created available to you on demand. You want to watch some obscure movie from 1931? You can have it delivered to your home in seconds. You want to see a particular episode of "The Waltons" from 1973? No problem. You want to see Game 7 of the 1951 World Series in it's entirety? No problem either.
This is what is coming down the pipe. Literally. And soon.
I think that had less to do with TV and more to do with anarchy in the governing bodies.