From what I understand, it isn't so much an issue of space or accommodations, but insurance, nanny regulation and encroaching housing communities. Combine that with the expense of producing and operating a racing airplane for one event a year and that event quickly becomes unsustainable.
Now, racers will race. Those who are dedicated will find a way to pay the freight, so I think that is less of an issue than the "political" issues listed above. After all, in nearly 40 years in the motorsport business I have never heard a team owner complain that racing is too expensive, or a driver say that the cars are just too fast. They want to race and will find a way to show up.
That said, the FAA has been wanting Reno to go away for decades now, and was always ready with new regulatory hurdles for the organizers to clear before they would allow the races to be held. As I recall several years ago, the FAA left them hanging until just a week before the races were scheduled to begin, and then only allowed the event to proceed with several last-minute restrictions added.
And of course, if you say the word "racing" to an insurance company they will all rush off whimpering to their safe space. If you say "racing airplanes" they fall to the floor whimpering and have to be tucked into bed with a plush animal and hot chocolate. Fortunately, their reservations can be easily corrected with a massive outlay of cash. Unfortunately, they know you have no options, so they price their services accordingly.
Finally, there will always be those that feel the need to move into (or build) a house adjacent to an airport or racetrack and complain about noise, safety, traffic, property values, the Crimean War, etc., etc. etc. This has been happening at Stead and the proximity of the new developments to the race course is giving the FAA and insurance companied the vapors as well.
I guess the end of Reno was inevitable, but I think it is sad statement on our modern world that those who don't participate and are not interested in such things hold so much sway over those of us that do...
Please pardon the rant. This kind of thing drives me crazy...
And I will third the motion for an air racing thread!
Mike