You can't make money out of shareware, so now everything is SaaS. This makes software way harder to write since now you're responsible for a distributed platform, including devops.
Competition is fierce now. There are very low barriers to entry, which made hobbyist projects (which is what Winamp would be considered now) mostly free.
If there's any money left in those low-barrier markets monopolies expanded into them. The only way to compete with them is with added value like a huge library of music (Spotify). Good luck trying to strike deals with record labels as a lone developer. VCs will devour any corner of opportunity in a blink, demanding growth, which will turn a perfectly fine piece of software into a feature-crept SaaS privacy-invading social platform.
TL;DR: money isn't in software anymore for self-employed people.
Do we know how sales of Reaper are doing? That's Justin Frankel's latest project, and it's shareware in the truest sense (downloadable, 5 second nag screen & no other limitations - "you are on day 329 of your 30 day trial period").
Of course, Justin probably doesn't need the income because he has Winamp/AOL money, but I was under the impression that Reaper was at least providing a full time income. And it's certainly supported by most of the music hardware/software industry.
Just look at Bitwarden. It started out as a free and truly secure answer to password managers that were cross-platform and web/browser-based, but had issues with trust and privacy. A lone developer put his money where his mouth was, and built the product up into a SaaS that is now a small but profitable company. It’s now the fastest growing password manager out there, and certainly one of the more popular among techs.
That counts towards the parent comment's thesis, not against it. If it wasn't a SaaS charging would be much harder.
This is mixing two concerns: Selling stand-alone applications and the specific shareware distribution model.
The SaaS world is struggling with the "freemium" model, too. Nothing pretty much changed there, you get your nag-screens, limited features etc.
Selling apps still works for a lot of people. Sure, it's harder when there's a popular free version available, but the same is true for SaaS again.
One major issue is the pernicious "growth" mindset: Today it's often not enough to earn some decent money, you have to "found" something. And sure, it's friggin' hard to grow a company out of a shareware product.