Maybe this scene is foundering because a lot of people have OD'd on hip, ironic
(and often plotless) fiction about a bunch of Starbucks addicts having bad relationships... Not that every short story has to feature naked jungle maidens turning into monsters to hold my interest, but... What a minute, actually it does....

Did you read the above article? This is due to AMS going under, impacting PGW... not a floundering scene. From McSweeneys' website:

"As you may know, it's been tough going for many independent publishers, McSweeney's included, since our distributor filed for bankruptcy last December 29. We lost about $130,000—actual earnings that were simply erased. Due to the intricacies of the settlement, the real hurt didn't hit right away, but it's hitting now. Like most small publishers, our business is basically a break-even proposition in the best of times, so there's really no way to absorb a loss that big."

OK, point taken-let's observe seriously
for a moment... Whenever something really cool, hip, and non-mainstream happens, it only seems to be afloat for a limited time before the incoming tide of mediocrity takes it down; Sassy, Spy, National Lampoon come to mind-admittedly they didn't have the cataclysmic financial situation you mentiioned, but something about this kind of stuff is always ephemeral, and it bugs me too. If it wasn't AMS, it would be something else. I hate being fatalistic, but there it is all the same....