I'd expect general engagement to naturally decline over time as people of a certain age have had their years of fill with the hobby and are onto other things, but more so there's really not enough "new blood" to replenish the open spots. Someone born in the late 90's/early 00's just don't have that experience that we had of going to a location to play the premium experience of a game, the industry had a shift and their memories were on capable systems like the PS2 with online play. You can see this with other hobbies where interest/pursuit have peaked and other sectors have picked up. A generational shift. I also feel things in life have just generally changed in the past few years and we feel like "where did the time go today". I'm certainly less engaged in forums than I used to be - more distractions, junk social media, fb marketplace doom scrolling, to take us away.
I think people quickly know that a child sized arcade cabinet with weak controls is not the same as a full scale commercial arcade cabinet. If they have a bad experience on a 1Up then I don't think it would turn them off from owning a full sized cab - rather those who want it will pursue it. Others just don't want 300lb monoliths in their house - we're a niche group. Likewise I know a few people who went straight into buying full scale originals and they didn't last over 1.5 years before selling - it was just a fad, not for lack of experience. It was just like the treadmill in the bedroom for them - a fancy laundry hanger. I think it takes a certain type of person to own a full scale in the home and to continue using it. I don't get too amped up when my friends say "I want an arcade machine", because I know it won't reach far past the honeymoon phase - I typically try to recommend a solid full scale multicade for variety sake.
The G'AIME isn't enthusiast grade. It will capture the casual market and is accessible. Many will fad out over time as there's only so much you can do in that rotation - maybe it will be moddable. But it will be nostalgic curiosity for sure for many. And if that's good enough for them, then I can't argue. I do see a spillover of those wanting more and learning about other options like Gun4IR or Blamcon. I think it will create a small gateway, but better than never introducing anyone new. Those who exit were probably just in for a quick fix to begin with and happy leaving it at that.