I think the decline of FILE_ID.DIZ files is largely a byproduct of changing distribution methods. Back in the BBS and early FTP days, these small text files were crucial because they provided a quick summary for file archives, especially when bandwidth was limited, and you couldn't afford to waste time downloading the wrong file.
With the rise of platforms like GitHub, GitLab, and Bitbucket, project descriptions and metadata have become more integrated. The README.md has essentially replaced FILE_ID.DIZ as the default "project descriptor", but with much more flexibility for formatting, linking, and even embedding media.
Additionally, the way we discover and share software has changed. We now have package managers, app stores, and automatic metadata parsing tools that handle much of what these files used to do. Plus, we expect modern software to have much more comprehensive documentation than a few lines in a .DIZ file.