Melissa, that's exactly it.
Kids are reading chapters younger, but that doesn't mean they don't enjoy pictures anymore. And parents will read fewer longer books, but they still get read.
I've been told it's all related to the shift from school and library as the primary sales focus for picture books to trade as that focus because kindergarten students are reading chapters. But I still hear about picture books being used as mentor texts in K-2 classrooms, so I don't know. I think there is a complex socio-cultural phenomenon behind this shift. It seems reasons include teachers, parents, shortening attention spans and a few other things. But this could be a catch 22. Maybe parents are reading shorter books because that's what is available and this plays into the shortening of attention spans. I just hope the pendulum really does shift more toward the middle, where a book has the number of words it needs for its story--no more or less.