/loli/ got co-opted by a weeb on 8chan who proceeded to enforce an eastern art only rule and destroyed the active and popular drawthreads in the process because its not like there were any japanese artists using the board. As a result the board died and everyone moved to /delicious/ and its become the defacto loli board ever since. The only reason /loli/ has managed to still cling to some semblance of relevance even here is due to its status as a legacy board which makes it more recognizable to those who had no idea what happened.
Of course this board has had its own share of fuck ups since then like threatening to ban all unteralterbach threads because people dared to continually reference the blatant connection its characters have to real life people. Considering the unteralterbach threads were such a big hit and them being banned from /loli/ for being western was a contributing factor to /delicious/ rising to prominence threatening to ban it as well was a very shit take.
Personally I think people are just tired of the porn boards they visit being headed by people who think they're the arbiters of what should be talked about or posted regardless of whether or not its on topic, so thats why this board too has lost a lot of its former userbase. When you don't take into account that the entirety of 8chans userbase was only there because it was a free platform and act in a way counter to that you're going to lose that userbase, both jim and the owners of this site fail to understand this which is why jim's 8chan lost all its users and this site hasn't managed to pick almost any of them up.