That is not totally true, I mean in Skyrim dragons come back in full force as a general nuisance and they still have a civilization of sorts in that and honestly doubt it was hard to write. Yeah a lot video games and Manga setting actually do have worlds where races like the Beastmen or Elves are at the height of their power (generally as rank bastards that view other races as livestock and devalue sapient life) and have fantasy critters out the wazoo which are often treated as just regular animals in the setting.

The final “this or that” idea being popular probably has to do to with the absurd British philosophical concept that “Magic died out like the dodo for X reason” that was popular in the late 19th century among scholars,  occultist, Atheists,  fairy story collectors  as opposed to ideas about Ragnarok (misunderstood calendar cycle or no). Tolkien was likely deeply influenced by this way of thinking as there was a lot of that 19th century media was readily available to him, and if you influenced Tolkien you influenced modern fantasy.

“The death of magic”  often comes up in fantasy works by skeptics and the others as the brain dead “we can slay God(s) by not believing in them” except with “magic” replacing “God”. The fact is that if creator God(s) exist they would likely continue exist weather you believed in them or not and in the case polytheism creation would quite possibly egg your house or mock you publicly in ways only gods could do if you did stop believing in them, the same would also be true if magic (fireballs and fairies magic that is) where real.

Some however, like Tolkien, posit things like immigration due to boredom (elves leaving middle earth by boat while sad for Middle Earth is not really the the end of elves) and simple extinction due relatively realistic reasons (Ents can’t find Entwives? the citizens of China are in the same boat).