It's the economy, stupid

I don't know anything about the decline of kids' TV but I agree with Bob Wootton when he says that Ofcom's crackdown on advertising to kids hasn't helped. TV companies don't have much appetite for making kids' programmes at the best of times, but when they can no longer get their shows underwritten by the manufacturers of sweets, they soon give up altogether.
At the same time hardly a week goes by without another teenage magazine closing, their traditional room for manoeuvre restricted by the limited amount of advertising and the fact that the supermarkets watch them like hawks for any sign of risqué material, aware that if they don't some backbencher will be on the Today programme talking about moral decay.
In terms of both kids' TV and magazines the old world wasn't perfect but it was better than what's come in its place. The kids aren't missing anything, of course, because they're quite happy gawping at TMF rather than reading. If there's nothing in the "Grange Hill" line they'll just watch whatever their older brothers and sisters watch.
Despite the best efforts of government over the last ten years, you don't change people's behaviour from the top down. Something similar happened with school meals post-Jamie. Given the choice we often choose junk.