Is the Bionicle community dying? Maybe, maybe not, I don't really know, however, I do have some reasons for why it might be dying
First off is the fan base, as most people who grew up with the theme are getting older and growing out of it. That teenage/kid audience that once enjoyed Bionicle in its heyday are now in their 20's or maybe even 30's, or they are about to get there and have other things like college and jobs to focus on rather than plastic action figures they enjoyed in their childhood.
There's also that younger audience who are currently in middle or elementary school. While they did have a Bionicle reboot for a couple of years, they already had other themes like Ninjago that had become just as, if not more popular than Bionicle ever was to occupy their time with and fanboy/girl over. There's also the fact that some of these kids never grew up with Bionicle and instead had Hero Factory, which while it was popular, never really matched what Bionicle was able to do.
Aside from the audience, there's also the way Lego handled the end of G1 and the whole of like Square mentioned. In terms of the end of G1, we got these crappy little figures with only like 15 pieces or so, otherwise known as the Stars, which fans hated with a passion. It also didn't help that after the cancelation of G1, the serials that were being posted on bioniclestory.com were ended prematurely with no real conclusion for fans, leaving them to speculate what would happen to close out these stories.
Meanwhile, in terms of G2, there was very little advertising done for it aside from maybe one or two tv ads along with a debut at the New York Toy Fair. This meant that the only real way that news was spread was through G1 fans who were still interested in the theme and that it was harder to get newer fans interested in the theme. Otherwise, the rest of the budget was most likely spent on golden masks for social media contests, that aside from the two moc building contests were not viewed too highly. There's also the fact that Lego showed off things that we never got like Makuta and the Mask of Ultimate Power, due to the line being canceled prematurely and leaving what fans there were with a bad taste in their mouths.
However, there is a bit of a bright side. If people continue to produce Bionicle related content like mocs, memes, stories, and videos, the theme will never truly die. Heck, there was that Bionicle meme trend that started right after G2 ended, which got people to reminisce about the times they had as a child and keep those memories alive. Let me use a line from Macklemore's song Glorious: "I heard you die twice, once when they bury you in the grave. And the second time is the last time that somebody mentions your name." While Bionicle has been buried in the grave (twice), the name still lingers and is carried on by a passionate group of fans who don't want their childhood to truly disappear forever and as long as that passion is still there, Bionicle and its community will never truly die
So, is the Bionicle community dying? Yes, however, it will never truly be dead as long as its legacy and the joy it brought its fans is never forgotten.