I think Arnenna is mostly right. Maybe entirely right.

But in one way I am not sure either of you is fully right. Some people were unhappy because content came too slowly and they were bored with nothing to do after racing through it. Ignoring the question of why anyone would want to race through it if they didn't have anything else planned to do on the server. Some people were unhappy because content came too quickly - perhaps more likely for a player with less time to play or more desire to run a series of alts up to the content or more desire to bum around and do a lot of different things including crafting.

But my own guess is that the fall-off of population was inherent and structural. The perceived advantages of the server kept getting less with time. It wasn't brand new with everyone equal. It didn't have a fresh economy. It wasn't a server without the curse of (fill in something you hate whether LIs or Big Battles or Mounted Combat). It was an almost current server with a 40% reduction in experience making it harder to get to the current endgame with new alts.

Will this doom Treebeard and Shadowfax? Perhaps not.

Shadowfax will, in the fullness of time and if it survives, also become an almost current server. But it will be one where progress remains fast and alts will be easier to level than on "live". Plus it will have the difficulty slider which may or may not ever get to "live". So people will have reasons to stay that didn't apply on Anor and Ithil.

Treebeard will become an almost current server far later in its lifespan. So anyone that would leave as e.g. Rohan hits would be there much longer. Plus it too will have the difficulty slider. So it may fail - any server may fail - but its fate is not foreknown from looking at Ithil and Anor.