I'm not saying hobbyist should not turn a penny, I question the commitment to it being a hobby. It's always been possible for anyone to submit to an agency. The reason so many do now is because it's cheap and easy.
The goal all the time is for it to be easier and less involving, higher iso, more fps more more more. That to me that is the opposite of what you would want out of a hobby isn't it?
Someone mentioned stamp collecting, I would think to be a successful stamp collector requires a lot of input, time and dedication. Gaining the knowledge is part of the hobby. If photography is a hobby why would you not want to explore it, why would you not want to see what hand printing an image feels like? getting involved with the process.
Just hitting a button on your handheld computer and viewing on a computer screen, or maybe knocking out a print on the Epson at a flick of the fingertip must lose the fascination at some point. you might as well say texting is a hobby. There is little core of dedicated hobby photographers to support a mass global camera industry investing in r&d for the next improvement. Sure there are the dedicated, I doubt enough to support the industry anything like it is now. The dedication of the masses that call photography a hobby will swerve when the next gizmo becomes a hobby. When having the latest greatest camera no longer impresses other people, when a dedicated picture taking camera is not so cool, it will no longer be their hobby.
There are several ironies about the digitalisation of photography that I reflect upon with a certain wry amusement. The foremost is the enthusiasm with which it was greeted by professionals; it was cheaper, quicker, more cost efficient for not only did it do away with film but also the necessity of having someone else do the printing, the photographer retained control of the whole process as Rob C. has pointed out. Now we are told that digital cameras have ruined photography because anybody can now do it cheaper, quicker etc.
The second great paradox is that the very companies that pro's slavishly exulted for producing ever better equipment were the very ones promoting their cameras to the public with the suggestion that they could now take shots as good as any professional. Why we were not boycotting Canon and Nikon rather than salivating all over their latest cameras and lenses? Items of kit, BTW, that relied heavily upon IT for their design and manufacture, the same sort of technology that was found in the cameras themselves. The camera companies pulled off an almighty con in my view, but it's too late to do anything about it now.
I would agree entirely that the camera to many just became an extension of the PC, something useful to do with the shiny new computer, and this has transformed image capture into a whole new sphere of social discourse. Note that I said image capture and not photography for we all appreciate that the two are different although the most people don't, or I should say, didn't, for I get the impression that the recognition of a photographers skill is making something of a comeback which brings me to a third inconsistency.
How often do we reassure ourselves that a good picture can be taken on any camera? We then wonder why people think they don't need photographers anymore, the answer is because we've just told them that! Sure, in the right hands and right conditions pretty images can be created on most devices but their performance envelope is quite constrained which is why Canon and Nikon sell cameras at 5,000 bucks as well as 50, to ensure that good photos can be taken under a much wider range of conditions and with a better image quality.
We also fall into the trap of talking about photography as one great homogenous craft which simply isn't true. There are those who can do very well in a studio while others will present landscapes with a sentiment that adds greatly to the viewing pleasure and so on. Adam Smith came up with the idea of the division of labour and he was probably right, to a point, and I don't see why photography should consider itself immune to the strictures of that theory.
I will happily repeat the cliche that the digital process put a bomb under the world of photography, but I rather hope and believe that the smoke is clearing, the debris settling and we can start to rebuild the trade, it won't be the same as it was before and to try and impose the old structure will the biggest mistake of all.