While I think that's true to a good extent, it's not entirely without reason. Rents and mortgages are expensive, so smaller dwellings are becoming more and more common. I have a ton of HO trains and a small collection of O that I won't be able to do more than display until my girlfriend and I get married and buy a house. Once in awhile I'll set up an oval on the dining room table in my apartment to test a train out, but nothing I can really do anything with.
The other reason is pricing, especially if you're interested in smaller, less popular roads and oddball equipment. A set of Rapido Shoreliners and an FL9 is the equivalent of around three months car payments for me, and a good chunk of one month's rent. I think that's why screen time, and in particular digital railroading and simulation has become such a popular industry. Rail Simulator and TSW DLC is a fraction of the price of a new HO model.
I was in middle school when MSTS came out, and I think that's where my interest in trains really started developing. I'd always had an interest in trains, my old man said I "emerged from the womb with it", but it wasn't until I was able to learn how the equipment operated and about all the different equipment from past to present, from not just the US but other countries as well, that my interest blossomed into a passion and desire to learn and understand more and more. Picture Johnny 5 from the Short Circuit movies, 'NEED MORE INPUT'.
I've found a balance of model and digital railroading in my life now that I'm older. I still lean towards digital because of the room and pricing issue (I just bought the TSW Amtrak SW1000 and Cab Car pack for $20, the HO models would easily be ten times that amount). As I get older and buy a home and have a larger surplus to my budget I will absolutely start modeling, but until then I can totally understand and appreciate why younger people just aren't interested.
Obviously I don't speak for all Millennials, especially the younger ones that even I've started saying "damn kids" about, but for the ones in their mid/late twenties like myself, that's my two cents of friendly input.
"That sapling that once grew just south of Wassaic may be long gone, and the Harlem Line’s appearance may have changed over the years, but for decades to come, I can count on it continuing to provide me with funny recollections"