I can see some older gentleman, decades ago, watching a kid fly his die-cut FF model, tck'ing his tongue, and wondering where the builders have gone. "If you ever want to REALLY make a model, I'll loan you my axe. All you did was trim glue the wood already cut for you!"
As was stated before, building is alive and well but the materials and methods have changed. Although most scratch builders are experienced fliers, even young people are building their own planes out of inexpensive hardware foam. Some of them are just downright beautiful. I like RTF's, too. Teach a kid to fly, see if they get hooked on how cool it is, and then gently introduce the idea that there are thousands, if not millions, of planes he can fly... he just has to make them, first. Passion breeds diligence; diligence breeds patience.
I think it's also worth pointing out that they're doing things with models today that would have been considered impossible decades ago. Yes, I'm talking about electronics. Imagine when you were building your plane if a man handed you a little piece of plastic and said, "If you can learn how to control this, your plane will do anything you could ever dream of it doing. It can fly itself, it can take pictures, you can put a camera in it and with some special glasses feel like you're really flying!" Would you have been interested? I know it's far from the planing sanding finger-gluing world of "true" model building BUT it is an educational, interesting, puzzling, and downright complicated world that many young people are mastering right now.
We currently have entertainment overload. Trying to get a young kid these days interested in scratch building from the beginning is like never exposing them to puzzles at all and at the age of 7 throwing a 10000000(x100^100) piece puzzle at them and expecting them to have fun. "What, you're bored?! What, you think this isn't as cool as your vijamagames and walkpods?! Spoiled kid, no respect!" I'm just saying that you would have a better chance in getting them interested if they were addicted to seeing the final image at the end before they start. I don't know many kids that are just itching for a "slow, relaxing hobby to clear the mind after a hard day of work". This is especially true when considering that they have interactive, interesting, beautiful, social, puzzling, mind blowing entertainment at their fingertips at any time. Often, for free.
Speaking of which, at 31 years old, I think it's worth pointing out that my entire interest in aviation stems from a video game called "Red Baron". I would play it with my dad, when I was much younger, and we had tons of fun together. I remember being interested in those pilots, reading books on them, and their aircraft which fueled my passion to learn more. That knowledge bread a passion to control and experience those things I had read about. That passion led me into FF model building which led to becoming a mechanical/aerospace engineer which will lead to (hopefully) amazing things in aviation in the future. If I hadn't had that, I never would have been interested in aviation much less model building. "This is an Albatross D.Va, from WWI! It was made of wood and flew with a propeller." "Uhhh... yah, sure. That's great. Why should I be innately interested, again? Planes are old technology that has been a common thing since I was a baby. Now, if you could just show me how to make a lightsaber..."
I can't help but wonder how much of our love of building is actually a love of control. When we were kids, we weren't really in control of anything. Someone was always telling us what to do. Then, we are introduced to something that is OURS. It was something we were interested in to begin with but in order to get from point A to point B it's going to take some work; there was no way around it. If there was, we'd have taken the shortest route. "Work smarter, not harder", hah. Anyway, WE decide what to make, WE decide how it is made, and WE decide the quality. We can make new toys for ourselves that, for whatever reason, the parents support (whereas asking for some new toy from the store is almost always met with no). We decide when we work on it, we decide how long it takes, and we decide what other details we want to add to make it "better". Perhaps that's why I always loved those "choose your own adventure" books when I was growing up
At any rate, when your brain tells you "I REALLY want that!", but it's not an easy process, you will be more willing to make the extra effort to get it. The things you learn along the way (the joy of having something you made yourself, seeing it all come together, seeing your choices pay off, etc) are worth more than whatever it was you made. The problem now is getting their brain to crave small, wooden models planes that actually fly and look like a real plane from a really cool period of history. "That actually fly" wouldn't be a selling point in today's world, by the way. Lots of things fly, no big deal.