If you read the excellent article posted yesterday by Frank Sheed - The State of the Catholic Church in the US - you will find the answer. It all boils down to the local ordinary. If there is support and encouragement for Catholics to practice this Sacrament on a regular basis, the pew sitters will respond. In my diocese, many parishes have dropped weekly Confession and instituted semi-annual Reconciliation services. The more 'orthodox' Catholics still adhere to regular Confession.
In all fairness to my parish, it's not a diocesean one. It's a Dominican parish. People from all over the diocese come here. There is a great demand for it.