I think the reason by the fade away of fretless has its natural reasons.
Firstly, fretless got popular in the era of fusion and Jaco, then faded away already during the 80s when the jazz scene went back to its more traditional sound with upright bass. Being an upright player or doubler myself I allways get asked to play the upright rather than electric for the jazz sound. In pop music I allways play the fretted bass because thats often the most right sound for that.
In my opinion, the fretless is more sonically midrange oriented with often taking too much space where the guitar or piano usually sits, so I guess its not the best option for the mix. Also the introduction of synth bass in the 70s and 80s still competes strongly in the pop scene, so the question is more of where actually the fretless has its more natural and dominant place today? Its not rock, metal, pop, classical, prog or even jazz (except some fusion guys). Yes, there are pioneers like Gary Willis and on occasion Richard Bona, but none young leading jazz bass players that I know of do it today (only Esperanza Spalding comes to mind plays the fretless on occasion).
I love Jaco myself, and have of a really nice Sire V7 fretless that I use for practicing Jaco or emulating synth bass lines on covers (check out my covers on my Youtube -channel - Oscabass if you want see how that can sound like). You guys that still enforce the fretless are heroes, Im very happy to watch all the great players on fretless on Youtube. Im sure it will be popular again soon, if its not already (relativily speaking).