I was a member of a community with a strong otherkin presence back around 2003-2006. It might be mostly based on where I spent my time afterwards, but it seemed to me like the otherkin community was already significantly in decline by 2013 or so.

This is mostly wild speculation, but I kind of suspect that increasing awareness of transgender issues may have increased marginalization of otherkin, because otherkin have a propensity to make transgendered individuals look bad. The Attack Helicopter meme became widely despised in social justice circles, first for being extremely overused, and second for not really engaging with the positions of the people it was being used to argue against, since among other issues, nobody is actually asking for systematic social accommodations for their self-identification as an attack helicopter. But, there genuinely are quite a lot of otherkin, who actually do identify as nonhuman creatures, sometimes as fantasy beings that don't even exist in reality. The prospect of having real people who identify as creatures whose psychological experiences they could not realistically have, and who might ask other people to respect that self-identification if they felt they could get traction for it, is pretty troublesome for a position that argues that people should be allowed to define the terms of their own identities. If there actually are people whose self identifications are about as absurd as people who identify as attack helicopters, it really calls into question the notion that people won't come up with absurd and unwarranted self-identifications in the face of the social inconvenience that poses, and so we can trust people's self-identifications to be genuine and meaningful.