I think I know what happened. All the weed snobs have moved on to doing dabs. They aren't buying buds anymore.
The people who are still buying bud just seem to be accepting the fact that the quality isn't as good as it used to be. These dispensaries aren't seeing less traffic because of it. Now the dispensaries have figured out that people will accept lower quality for the same money. So if they can buy outdoor for $2k, and people will pay $55 an 1/8 for it, why would they even want to bother with good indoor? Lower profits. The only reason they would accept lower profits is if the customers demanded it. Since they aren't, why would they want to spend more to get indoor?
That only goes so far though. If the bud is shitty right now, it's going to be god awful by summer time. We'll start seeing brown bud on the shelves soon. The average dispensary customer might not be able to tell the difference between top shelf and midgrade, but they know brown when they see it. Just wait for it. Cali will experience a bud drought this summer.