1.6 is still doing okay in EU; however, the US scene is about dead. Source isn't doing a whole lot better. I've played 1.6 competitively for around 8 years (won esea open/cal open/esea main/went to CPL/etc. etc.) and there are certain factors that have attributed to its decline - which began, in my opinion, around the release of CS:S. Source split the community in two - on the pro/amateur/and casual level. Teams wanted to switch to Source because of the money involved, and financially, why wouldn't they? The game offered them an opportunity to make money, a lot of money, and fast. A then, state of the art engine (HL2) would require many gamers to upgrade their computers, purchase the new software, etc. Whereas, boring old 1.6 was not generating much profit. However, to this day, MOST 1.6 pros still hate Source, even if they did make the switch - and this has been the major problem with Source - a disproportionate amount of casual gamers who don't give a shit about watching tournaments/ going to LANs/ or competing in relation the few number of "pros" in the scene. The game is still seen as second rate (skill wise) to that of 1.6 in the community - hindering it from flourishing as the 1.6 players won't play it/watch it, either.

CS 1.6 was really the last 'big' game that relied strictly on game play for its success (no story/poor graphics/etc.) This has been an important factor in its decline because it limited the games gamer-base (influx vs. deflux of new gamers) in that, over time, the 'new' gamer has become more interested in stories, cinematics, graphics, etc. etc. They are not interested in 1.6 any more than you are interested in buying a Sega and playing one of the consoles classic games continuously.

SHORT: took an adderall and wrote too much. CS 1.6 is pretty much dead in the U.S. due to lack of sponsorship/tournament dollars/ Source still sucks/ ESEA is really the only league left in the online scene in USA.