I don't have the numbers to know if AIO's are killing custom loops but after having assembled my first loop successfully after using an AIO many years ago I'd wouldn't go back to using an AIO ever.
Air is basically maintenance free other than a dusting and good coolers can still compete.
Custom cooling will always be more expensive (in terms of raw parts cost and labor) but I like being able to know I've checked every gasket and connection for a leak proof experience so going all in also means perfecting my setup to 100% satisfaction including the proper tube length to fit into my PC case and piece of mind knowing it's not going to leak. Also with that I know something about the fluid being used not being a problem that's going to gunk up in the fins. I'll add that when I got my first blocks I didn't try to get "the best ones" and managed to get both on sale with heavy discounts but the fittings are what really killed my budget. If I had to make any recommendations for new customer loop builders it would be (in no particular order)
- get what's on sale that's not pure garbage
- use a simple D5 and tube combo
- use clear fluid only
- use opaque low permeation soft tubing
- don't get the smallest tubing size ex: 10/13mm, go 10/16mm instead
- don't bother with distribution plates
- any money you save not buying something RGB can be put to better use building your custom loop
- pressure test with air before filling your loop
- mistakes will happen so plan for it
Although AIO's seems to have gotten better I hate the ewaste aspect of it approaching almost a consumable product and the pumps will likely be worse in terms of noise and failure rate especially over time. I just want a trusty D5 I can put on top of a CPU waterblock/reservoir to make things more compact but by the time EK gets around to that it will be 400% more expensive for no reason at all. If custom water cooling dies it will be partially because EK helped price it into oblivion.