Gaming companies contributed to the death of LAN parties too. They killed the "split-screen" gameplay that would support 2-4 players on the same machine. They wanted each player to require their own copy of the game. They killed LAN support, forcing you to play on their servers. Culturally we saw a shift towards social isolation. People are more comfortable talking over a mic.
I don’t think split screen has anything to do with it unless you are talking about consoles.
The biggest factor was companies removing LAN play as an option from games. Forcing you to be always online and not allowing you to run a local server.
When you can play an offline LAN game you can also use pirated copies or reuse cd keys, which was always necessary to get everyone up and running.