I disagree, respectfully but firmly, with this idea. If it were so, you wouldn't see the various mountain man series that Wheeler and others have been writing successfully.
Part of the appeal of the Western (historical or traditional) is the escapist element in it. We've been comparing them to SciFi, but perhaps another good analogy would be the fantasy novel. In no small way the Western is the mythology of the United States. The appeal of the myth goes in cycles, but it is still there. And it's also the myth that many other countries think of when they think of the United States (look at Sergio Leone for one).
Sure, the plot structure and elements will evolve, as will the vision of main characters and the historical segments covered. But the appeal of Shane, the Man with No Name, Will Muny, Jose Wales, and others will always be there. The myth of the lone lawman, gunman, or trapper carving his own place in an expanding realm will always appeal to people.
I've heard the urbanization argument before, but I don't completely buy into it. It has an impact, to be sure, but at the same time it can also create a longing for that escape. I would tend to point more at the increasing ignorance of most Americans of their own history as a contributing factor.
I'd hardly call such mountain men books proof of anything, except that a couple of writers can still sell such books. How many such series are there? And mountain man books are not usually counted as traditional westerns, at least by publishers. I said some writers will still fill a few spaces, but sure not many, and most of them do not sell very well at all when compared to novels in other genres.
Nor are the books you list the standard fare of traditional westerns. These are all writers who stepped outside the bounds and did something different, or writers who are writing historical, not traditional westerns..
There will always be a market for escapist novels, but there are many types of escapist novels, every genre has more than its fair share of escapist novels, and I just do not see huge numbers of readers drawn to traditional westerns as escape reading. And most of those who are drawn to such can more than fill their reading needs with already written and published novels.
Yes, the appeal will always be there, but the question is one of numbers, and the more urbanized we become, and the further in time we move from the old west, the less I believe this appeal will be, and the lower the numbers, at least for traditional westerns. We can't even say the old west happened in the last century now.
Yes, the appeal will always be there for some people. but not, I think, for the masses as was once the case. Cycles or not, there comes a point for any type novel, and for any myth, when same old, same old will no longer fare well in the marketplace.
Time moves on, and the mythos moves right along with it. I don't think the traditional western will ever die, but I don't think there's a chance in ten million that the traditional western will ever again be nearly as popular as it once was.
Nor do I think it matters. The myth of the lone lawman, gunman, or trapper carving his own place in an expanding realm is the same, whether it's set in the hold west, or set on a far future science fiction world, a magic-filled fantasy world, or in a hard-boiled private eye world.
The myth, the spirit, the rugged individualism, the bravery, is in the man, not in the time period or setting where he lived.
But more and more, the majority of readers are going to find this mythos in genres outside of traditional westerns.
Nor do I believe good fiction is ever 100% escapist. I sure never read westerns to escape, and I've always hated writers who didn't have something to say above and beyond escapism. I think one of the things wrong with so much current western fiction is that the writers only think about escapism. Escapism is fine, but the writer had darned well better tell a story, and fill it with characters, that the majority of readers can somehow relate to and emulate.
Time moves on, and we either move on with it, or we get left behind.