Handwriting seems to be becoming more and more of a niche phenomenon, actually paying attention to what one writes with even more so, and actually using fountain pens yet more so. Still, there seems to be an absurd number of ink makers around, producing an absurd number of inks. I suppose dyes and water are relatively cheap, and can be mixed in buckets...
As a person who writes a lot, "seems" is the important word here.
In IT circles, computers and tablets are the most coveted tools for note taking due to processing flexibility it provides, but while less visible, writing is there, evolving.
From personal experience, writing with pen and paper unlocks a different mode in brain. Personally, I can concentrate better, think deeper and clearer, hence I work with pen and paper a lot, incl. software/architecture/algorithm design, free-form thinking while working on other things. I keep "lab notebooks" for software I develop. I also keep a hand-written diary, which again feels and affects very differently when compared to writing to a text document on screen.
There's another sub-culture who writes for the sake of writing (people generally transcribe books by hand). I don't judge them, but that's not my taste.
Some writing inks are very cheap (Pelikan 4001 / Lamy Standard / Parker / Waterman comes to my mind), but some pigments and dyes are very expensive and inks are produced in limited quantities. Companies like Noodler's produce very interesting chemistries and try to keep their costs low to provide the most ink for the buck, but they also make some exotic inks. It's not uncommon to ask a producer why an ink is not produced anymore, and getting "they don't make the dyes anymore, we got their all stock they produced for the last couple of years" as an answer.
So, tl;dr: Writing has evolved, but it's not going anywhere soon. Some of us are writing a ton, with purpose and intent. And no, some inks are not cheap, but "standard issue" inks are optimized for cost and performance, and they are very good inks, indeed.
If you have any questions, I'd be happy to answer.
A good number of the inks are because of artists, hence the wide variety of colors including colors which are not particularly useful for writing. The water based inks used in fountain pens are the primary inks for pen and ink drawing because they allow all of the classic techniques like washes and water brushes which do not work with other sorts of inks. Many of the makers of these inks have started to exploit the fountain pen fad to expand their market.