See, from a financial viewpoint, Horror films have been some of the most successful films ever made. Examples like Halloween and the Blair Witch Project, costed literal peanuts and made back twenty times their budget whilst launching franchises for studios to bleed for as long as possible. Horror films are also the go to for many indie and beginning directors, because they are easy to pull off with unknown actors and low budgets, not to mention studios love proven formulas, so the cookie cutter ghost and slasher flicks are gaurenteed money makers with smart marketing and quick cut trailers utilizing YouTube ads ( instead of paying for time slots like they used to ), and with the popularity of badly written creepypasta crap like Jeff the Killer and Laughing Jack, the success of purposely schlocky crap like Birdemic, and the money making potential of intellectually devoid rehashes like the Paranormal Activity sequels. Any type of horror script that comes across a studio exec’s desk is a safer bet than almost anything else.
If you’re talking about critical response, horror flicks ( slasher flicks in particular ) are easy targets for holier than thou column crusaders and keyboard warriors to shake fingers at and blame society’s/current youth’s downfall on. Then again, anyone with half a brain would take one look at these terribly biased reviews and move on without giving them an ounce of consideration. Siskel and Ebert were particular offenders about these films, but also would often contradict themselves, each other, or attempt to argue that films which garnered universal acclaim aren’t actually horror films.
A perfect example of this, is in their reviews of Henry: Portrait of a Serial Killer, versus William Lustig’s Maniac.
https://youtu.be/0JbBtiTxxRY
Both of these flicks ( essentially ) tell the same story. They’re a sleazy and disturbing look into the mind of a deranged serial killer. Both are dark and gory character studies that flow in similar ways. Whereas Henry plays it straight the whole way through, Maniac is admittedly slightly more exploitive, but both Michael Rooker and Joe Spinell deliver haunting and engaging performances in their roles, and the films are both undeniably intense and chilling. But, while Maniac was met with shock and moral outrage because it’s about a mysogynistic serial killer who savagely kills women ( ... Because it should be about a serial killer who loves women and savagely brings them flowers ), Henry was met with acclaim and positive critical reception because it’s about a mysogynistic serial killer and his rapist partner who savagely kill men, women, and children.
But, to get back to your original point, in terms of being successful in regards to scaring people, I guess that depends on what you consider scary. If it’s jumpscares, then the horror genre is the most successful genre of all time, because the market is saturated with boo scare riddled garbage like The Bye Bye Man, The Apparition, and The Gallows that vapid audiences keep paying to see which explains how they continue to pop up every January ( dump month ). If you are talking about an effective and atmospheric experience that sticks with you and pulls off its beats masterfully, I can’t really argue with the decline, but there’s been a steady decay in the industry as a whole in terms of originality and good storytelling, not just horror. But I still maintain that horror films are probably more successful than most other types.