That's not even taking into account the loss of players to more culturally relevant sports. You can see this in the number of black players in the majors. There used to be an enormous amount of African American talent - where is it now? African Americans didn't lose baseball talent in a generation.
from http://www.twincities.com/mld/twincitie ... 938574.htmNearly 60 years after Jackie Robinson burst through baseball's color barrier, U.S.-born African-American players are virtually vanishing from the game. Three decades after blacks made up nearly 30 percent of major league rosters, they now make up about 8 percent - less than half the 17.25 percent of 1959, the first year every team was integrated.
I think this is probably pretty representative of the talent loss in America. Also, I'm in my late 20s and I have never seen a pickup game of baseball. Just because you make them play when they're kids doesn't mean you're exposing more people to it. Kids were outside a lot more back then. Most likely the next Hank Aaron is a starting linebacker for you college football team.