Tom,
Where are munis on the verge of extinction?
In many markets they do dominate. A couple of reasons but the they all seem to boil down to the experience, quality, value equation. Most muni's tend to try to have the most economical fees. Afterall, the voters are the clients. This tends to draw alot of players for whom cost is the only factor, especially retired guys who need to get out of the house, so the other aspects that are desired by golf affectionodo's (sp?) don't come into play in the decision making process. However, for those for which these apsects do matter and whom are willing to pay a bit extra for them, they can find them at non-publically run venues.
When you get into more urban areas and the cost of land sprials, eventually all you end up with is either Clubs or munis. Take Chicago, New York, SF, LA. You have to go out a ways to find non-muni DF courses and most of what you will find are ones that have been around for quite some time.
Now, some of the munis will be either private clubs or formerly DF courses that couldn't make it but the muni didn't what to lose the open space/recreation venue.