> Playing an instrument is a complex skill that requires a lot of work and an expensive piece of equipment
Or it's something you just, you know, do? I listen to and play a lot of tunes from the Appalachians and you really do get the sense that just about everyone played something back in the day. They developed complex and extremely localized traditions that did not require formal music education to pass down. Some of them were musical geniuses, many were middling, just like with most things people do.
Even poor families would often have an heirloom fiddle around to learn to play on (sometimes even brought with them from Europe), and ownership of family possessions was much more communal. Many parlors or bars would have a banjo or parlor guitar around for whoever wanted to make some music while hanging around. Those without access or with limited woodworking skill also often made their own fretless banjos (which look different from what you might normally recognize as a banjo) out of wood and hide, or other simpler instruments like dulcimers. Not that there weren't also semi-skilled luthiers making non-concert-grade fiddles at more affordable prices. All this culture is well documented in the Foxfire manuals on Appalachian folk traditions, complete with schematics on how to make those things from different regions. Pretty far from 'made up'. Hell, a lot of American music traces its roots back to music made by actual slaves. It's hard to think of a group of people with less means and access to the things you've mentioned, and yet, music.
Music theory may have a nearly limitless ceiling for both complexity of understanding and expense of instruments, but your statement here completely ignores the entirety of global folk tradition. And it does seem like an accurate observation to me that participation in casual musicianship in everyday contexts has declined significantly in correlation with a lot of the trends in modern living.