Counter arguments:
While there are a ton of lost movies, we also live in a world in which services like Criterion Channel, Mubi, and Shudder make more film available than ever. The other week, I got curious and watched a movie from Ulrike Ottinger, loved it, and when I get around to it I can watch any of a dozen more of her movies.
Likewise, I just bought a boxed set of folk horror movies from Severin Films. I miss good video rental stores, but even pre-Netflix there weren’t more than a dozen US cities with video stores where you could rent stuff like that.
The top grossing lists are mostly dominated by blockbusters, it’s true, but let’s look at (say) 1978. Grease, Animal House, Close Encounters, Every Which Way But Loose, and Heaven Can Wait (a remake!) are the top five. It’s been a blockbuster-driven market for 40+ years, with the occasional breakthrough art house film and, more frequently, a big non-franchise genre film (The Martian, Us, etc.) None of this has prevented great directors like the Coen Brothers, Soderbergh, or del Toro from making very good movies.
There’s a market for super-hero movies. There’s also a market for “real” film. These two things are sometimes in tension, but I think at the moment they’re both viable.