Yep, Bloop has declined over the years, and is now a sad little puddle. But then most traditional diary/blog sites have declined, to some extent or other, as the microblogging trend of Twitter and Facebook has taken over. As people tend to belong to more and more sites, they have less time for each, so writing updates of 140 characters is far easier - specially when using one's phone, as more and more people do lately.
There are sites with bigger communities - Bloop has always been pretty tiny compared to the rest - but they are communities within huge sites, and you have to make an effort to find like-minded people to build up your own community. It's do-it-yourself community, rather than ready-made community. Ready-made community never really works over time, because people leave, new people arrive, and so dynamics change constantly.
Oh, and a lot of people left Bloop because of the 'crash' - when the server died and everyone's diaries were lost and irretrievable. Sure, there's been drama, but there's been drama right from the start. I actually think Bloop's present deadness is largely due to lack of drama - like, nothing is going on! Drama attracts the crowds, and causes people to rally together.