This is sort of how I see it. It is a window into the industry, but not necessarily into its overall health.
Looking in from the outside as a non-American, I'd imagine the doomsaying is mainly from the fact Sam Ash was once a big name in the industry, no? I remember hearing their name thrown around alongside Sweetwater's back in the day, albeit ages ago when Sweetwater was likely a fraction of its current size. How big was Mars Music in comparison?
Retail giants are shrinking their physical presence in many industries now, as well. This has coincided with a period of considerable corporate prosperity, but the writing is sort of on the wall as far as big box stores go.
In the 90's Mars Music was the second largest musical instrument dealer in the US, and just about the biggest in the Southeastern part of the country. They sponsored concerts and festivals had a fairly big media presence, at least in the pre-social media days. At their height they had 40+ stores in 20 states, so basically half the Continental US.
Sam Ash would replace Mars as number two, but didn't expand from the Northeast until around the time Mars was failing. I want to say they had a similar number of stores and footprint until closures started maybe 10 years ago.
It's important to note that Sam Ash had been on a somewhat steady decline for at least a decade, closing at least a store or two a year since 2015.
In comparison Sweetwater was a small five person studio gear business run out of the dude's house until the late 90's. They focused on studio gear, and more importantly information and tutorials and sort of hit it off in the internet age. They grew super quickly and since they didn't have a sprawling chain of stores to prop up they were able to do it safely.