Wow, people who have been around this community a while are
spoiled.
Compared to, say, the Civilization 3 community (let's just not talk about Civ 4) Knytt Stories has a frankly ridiculous number of level releases still happening. With Civ 3 mods -- and really, the mods are what makes that game worth playing, despite the perfectly adequate versions of the game released by Firaxis, just as user-created levels are far more what brings people to KS than Nifflas's handful of KS levels -- even at their peak it was rare to get more than
one good mod release in a
month. Here we are two and a half years after KS came out, and between levels being uploaded to the archive directly and levels being announced here but uploaded elsewhere, there have to be at least a dozen levels coming out in an average month.
If there were multiple great levels coming out on a daily basis back in the day, I can understand how the current slower rate could seem disappointing by contrast. Still, it's not as though there are merely one or two diehard KS fans left creating levels solely for each other.
The forums aren't the only yardstick that should be used to judge interest, either. I found the level archive, and was selecting levels partly randomly and partly based on recommendations from other sites around the web, for a couple of weeks before I even realised there were levels here that weren't on the archive. The whole old forums/new forums issue is confusing for people who weren't around when the old site went down (myself included), and KS isn't the only or even main focus of the forums anyway, which may be part of why it doesn't come up in a Google search for 'Knytt Stories levels' -- maybe we ought to organise a googlebombing of
the Level Releases forum with the link text 'Knytt Stories levels' or something similar, so that people who are looking for levels can actually find the forums?
Just recently a couple of art school (I'm guessing? There were no degrees in computer game design when I was growing up!) students visited the forum long enough to post a level they'd made as a school project. They'd plainly never visited the forums before, yet they were either familiar with KS already or had it given to them as part of their assignment. Possibly there's a whole world of KS players out there, trading levels they make with their siblings / cousins / neighbours / classmates / whatever and thinking they're the only ones who're doing it.
Just look at how often posts are read and commented on in the KS section of these forums, and you'll see your question was answered before you even posted it...
Edited to add:
Just to clarify what I meant by 'spoiled' -- NOT in the sense of a 'spoiled brat' but rather in the sense of, people who never have to worry where their next meal are coming from (which pretty much covers most people with regular internet access) are spoiled compared to people who will literally starve if they don't get that daily handout of a cup of rice in the U.N. refugee camp where they live. People who dine on caviar and wagyu beef filet mignon and pate de foie gras every day are spoiled compared to the first group also, but that's not the kind of spoiled I meant either... Basically I'm pointing out that whether this is an active community with lots of user contributions, or a quietly-dying one, is very much a matter of perspective.