The whole market is expending as it never was. It's just a specific role in that market that is suffering a bit from overcrowding. It's my feeling (based on talks with quite a few pro photographers) that the really good ones, offering or taking part in large packages, have never done as well as they do now. It's at the bottom (in terms of turnover, not necessarily talent) that there's a big issue. But you've got to be realistic: there was, for example, a huge amount of bottom feeding in the corporate event/wedding market. The production in that segment sucked big time. Why did people use them back then? Because most of the consumers weren't able to guarantee their films would be at least OK. Fuzzy images, film lost, etc... etc... The barrier to entry in that segment of the market was basic technical know-how and a routine that guaranteed that the results, if not pretty, would at least exist. That barrier to entry in that segment is now gone. At least, it is still a be hard to subcontract the photography of a wedding to a Mumbai based office...
Dammit, feppe, just when I thought I knew where I stood I find myself in total agreement with you!