Hollywood still has plenty to offer, it's just that the corporations who run everything would rather churn thru established properties than allow original ones to flourish since it's seen as safer.
Hollywood makes original movies all the time. Viewers just don’t go see them. Hollywood follows the money. If viewers watched original movies more, Hollywood would make them more.
Because those original movies are ass. They lost a lot of trust with the public and every decision they make now erodes it even further. Also the business model behind theaters is completely hare-brained and a lot of people don't have that kind of disposable income anymore. It's as if Musk is in charge.
It's silly to think the studio system will be the casualty. The writers and actors are striking because they are being bled dry for corporate profit. But the entire industry has been structured to protect capitalists, perhaps more than any other industry. Should a studio fail, another will absorb it's space.