I think AVRs have been killed off by soundbars ..
Sound bars have that massive convenience factor, since it's just a single unit, easy connection for consumers, and takes up no space pretty much (although, even a sound bar does sound a lot better with the bass unit, which can be concealed out of sight). But agree a home hi-fi with separate speakers will sound better.
TV sound has got worse over time, due to thinness of them I guess. My 2-year-old main TV (Sony) is unusable with it's native sound output, it's so bad.
I use a Yamaha YSP-2500 sound bar (with it's bass unit) with the main TV, but if I were to do it again, I'd buy a sound bar from the same manufacturer as the TV, because otherwise there's always some slight incompatibility or inconvenience.
For a smaller room, I have a TV with very few output types (not my choice; I didn't pick the TV). I already had a Bose Home Speaker 500 all-in-one "smart speaker" type of device for listening to music in that room, so I converted the TV optical output to analog (using a cheap box from Amazon that powers itself from one of the spare USB sockets on the TV) to plug into the Bose.
Major downside to the optical is that there's no volume control, so that needs to be done independently on the audio device.
Still, it finally got me acceptable sound for casual TV watching, but if I had had a choice, I would have just used a TV with sound bar with HDMI.
Some users just want convenience, and "ok" sound mostly, so the single devices (like sound bar, [albeit with a separate bass unit ideally!] or smart speaker) become attractive. But agree it is also a backward move, since quality isn't as good as the hi-fi separates.