Serbo-Croatian used to be one language with dialects. After the countries split it became two. A lot of the Serbian languages have mutual intelligibility. Smaller Eastern European countries just named their most popular dialect it's own language.

Communism is also likely to play a huge part. Part of the Marxist idea of accelerating progress is to get rid of dialects and make sure that everybody learns the local high language in kindergarden and school.

Diversity in the German language is also down. I had a university friend who came from a Bavarian town that had a dialect that wasn't able to be understood in Munich. Maybe <10,000 people could understand it. It did weird things like doing new word construction by for new inventions like skateboards by adding syllables together in a way that Germanic languages or even Anglo languages usually don't do. They had essentially their own grammar. But that dialect seemed to be dying and not used by the young anymore.