Eh, the reality is that the consumer market never trended off government models all that tightly. What you're seeing is the evolution of duty handguns; metal framed hammer fired wonder nines to polymer framed striker fired handguns. When consumers buy the latter they typically buy Glock 19, 17, 20, etc and there's an argument that they're influenced by government procurement decisions but even still the P320 never sold as well as Glock. As for the P365, it's a different category of handgun, a small-ish concealed carry handgun with way better capacity than the previous generation. Springfield Hellcat and Glock 43x are some of the competitors, not the P229. It's also worth mentioning that when the military or cops need a concealed handgun, they very frequently opt for the P365.

As for the P365 having maintenance/reliability/duty cycle issues, beyond the typical SIG beta testing on consumers shit I really haven't seen people having issues with it.