The bigger the liquidity pools get, the smaller the rewards. There's a direct inverse relationship. Seen from another point of view, if I only pay 0.25% to buy and sell on a centralized exchange, why would I pay more on a decentralized exchange?

Lots of what has been going on in early DeFi has been pyramiding, and, once that is over, things will come back into line with economic reality ... for everything legit enough to be listed on normal exchanges anyway.