Fagan acknowledges that there are many factors that are contributing to the decline of bowling. He's not putting it all on handicap, but I do believe he has a point.
Plain and simple, handicap is a competiton killer. In many cases it's subtle, but in general, it puts more emphasis on manipulating the system than putting the time and energy into getting better. It's hard to take any sport seriously where base scores can have little meaning.
The problem with "scratch" is that the vast majority of bowlers don't have a clue about the permutations it can take. They hear the word "scratch", and they immediately think it means the best bowlers in the house get together, steal the prize money, and run away with the league.
Capped scratch and Draft leagues bring relative equity to teams, and provide a much more satisfying experience than handicap. My experience has been that most bowlers who make the transition to scratch don't go back to handicap if they have a choice. Generally, they're more likely to work on their respective games, make the effort to participate in outside tournaments, and maybe even give PBA Regionals a try.
I don't know why anyone wouldn't consider this all a good thing.