Nor do I think that music notation will entirely go away at some foreseeable point in the future. But reading and using it will slowly become a more specialized skill

That I find more believable; but specialization is probably the wave of the future in general. I'm much more bothered by the prospect of interesting things dying out completely than that of their being "restricted" to a (possibly vibrant and vigorous) subculture. (These days I tend to think that most of "real" life takes place in subcultures or smallish communities -- maybe even cults! -- anyway.)

My impression...that the ability of American adults (not pro musicians) to read music notation with some fluency has hugely declined over the last half-century

I don't myself have enough data to confirm or deny this (I'm not a specialist in such topics either), but one should make sure to take into account the rest of the world: I have the impression, for example, that the Western art music tradition is currently in ascendance in China.

(I also suspect in general that people's impressions of what past populations were like are biased toward reflecting the elites of past populations, about which information tends to be more readily and reliably transmitted, which they then compare to a more general cross-section of the current population visible to them.)