If you look at the last 25 years . League in Australia has slowly grown, at the same time Union has slowly gone backwards..
Coincidence?
People seem to be attracted to the idea that RL and RU's fortunes are entwined, but in this case it is largely unconnected.
If you really dig into why RU is struggling in Australia it's got almost nothing to do with RL or the NRL, at least not directly, and the people benefiting most from RU's struggles are the AFL not NRL.
I'm going to oversimplify because I'd have to write an essay otherwise, but the core of RU's problem in Australia is pretty straightforward; the product simply isn't appealing in a market that is probably the most competitive in the world for contact football codes, and because of traditionalist attitudes in the sport (and frankly a fear of backlash from powerful supporters and other organisations within the sport) they've refused to make the changes necessary to their product to make it competitive in the market.
If you look at what information we have the AFL/Aussie Rules have largely been the beneficiaries of RU's struggles as well. Aussie Rules has slowly been replacing RU in private schools (admittedly for reasons largely outside the NRL's control), people abandoning Super Rugby sides have been picking up e.g. Swans and Lions memberships for the most part, etc, etc. That's not to suggest that there's been some sort of direct attack on RU by the AFL, because I highly doubt that's the case, more that they were just better placed to benefit from RU's struggles because of the historical animosity between the two rugby codes.