The desirability of live entertainment continues even when budgets decline. I predict that as more musicians adapt to the paradigm of small acts, more businesses will offer cost-effective live music, and opportunities to play music will actually increase.
It's all about supply and demand, same as in every other type of business. It wouldn't make sense to have a small venue for music if there weren't a lot of musical acts to draw from. Who wants to hear the same act all the time? As small acts increase, small venues will too.
So, looking at it THAT way, we are on the cutting edge of a paradigm shift that will actually benefit musicians everywhere.