Digital wasn’t the main reason rangefinders faded. Their decline had already started during the film era as SLRs became more practical for a wider range of photography.

Rangefinders have inherent limits: they are awkward with zoom lenses, long lenses, and macro work, and the viewfinder does not show exactly what the lens sees. Their focusing system is also manual, while most buyers increasingly wanted autofocus and more versatility.

Those weaknesses mattered even more as zoom lenses became common. SLRs solved many of these problems with through-the-lens viewing, and later digital mirrorless cameras covered much of the old rangefinder niche by offering compact bodies with interchangeable lenses, autofocus, and accurate electronic viewfinders.

At the small-camera end, digital compacts replaced the pocket snapshot role that many fixed-lens rangefinders once filled. At the enthusiast/travel end, mirrorless cameras became the lightweight alternative.

So the market for digital rangefinders is small mostly because other camera types now satisfy the same needs more conveniently. Leica remains the notable exception by serving a specialized, premium segment rather than the mass market.