This shift started to happen around 2009-10. Three things are at play:
Tooling around building websites has really improved. Web design work for smaller businesses has moved to Squarespace and Themeforest templates created by very talented eastern European designers. Both of these options are "good enough" for most businesses under a certain size.
Large companies have realized that design is a competitive lever. Responding thus, they are either organically building internal agencies, or acquiring small agencies to leverage internally. This trend is causing the leftover small and mid-size agencies to struggle and disappear.
People get their content from vastly different sources than they did 5-6 years ago. Most social proof around the quality of a product or small business is found via social media and aggregators like Yelp. Savvy businesses realize this trend, and are focusing their spending on these properties.
I agree with one of the commenters on the OP's site. Web design and development has become a commodity for the most part.
If you want work, you need to move to where the industry is going and appears to me to be a holistic product/service approach to design. Freelancers will struggle with that as they are very unlikely to understand all the customer touch points throughout the employer's organization. That's one of the advantages to moving design and development in-house.
If you want work, get a job in a Fortune 500 company. I guarantee that you will need to build relationships, change processes, work with other teams that have complementary skill sets etc. Yes, you'll get frustrated at the slow pace of change, but that's what makes it work and not play.
Of all the articles on DN, I really really wish this one was getting more attention & discussion.
I know for me it has definitely got my wheels spinning about what's next, as some Hacker News comments have shared. Both -- what's next from a development/tech perspective, what's the next frontier that needs generalists to conquer it, designers to apply their work... and also, what's next from a design perspective, how can design break out of the staid templates we continuously chain ourselves to...
Really making me think. Thank you @Sarah-Parmenter for a provoking, dynamite article.
What was the joke? The one from the start of the story?!? Can't leave us hanging like that.