Is it dying in Europe because the traditional European events are being farmed off to any nation with a dictator and a cheque book? Or are races being moved because interest is dying off?

From this side of the world it looks like the former. Many real fans see the history as being an important part of the sport (and any other sport for that matter). It is kind of like in Football in England when Wimbledon moved to Milton Keynes - loyal Wimbledon supporters simply washed their hands of the club, and most MK locals had no interest in supporting them either. Although Wimbledon as a club had supporters from MK before they moved.