Now, nearly 20 years later, the social landscape has changed, the new generations of clubbers are perhaps not represented by what PI is, and Disney has muted its presence in producing entertainment that's not family-friendly.
That's exactly what prompted Disney to begin changing PI, but they'll never officially admit it.
Some of us here at WDW Magic first heard of these changes back in 2005. We received our information from executive management at PI and barely talked about it on the boards to avoid controversy.
The unofficial reasoning back then
(in 2005) was...
1. Today's club scene is much different from what Disney will allow. Notice that Disney's advertisements always portray well dressed 30-somethings. This typified PI's demographic in the early 1990s, but not anymore; and today's club hopper expects more than a Disney-friendly experience.
2. Disney cannot compete with Church Street Station, which provides a modern club atmosphere. (This was in 2005, before the Station lost its popularity and before City Walk was a threat.)
3. Disney's clubs are overrun with drunken CP's who mindlessly blather to Guests about their unhappiness with the College Program every Thursday night. (This changed later...)
4. Some clubs, such as Mannequin's, have become hyper-s*xualized. This issue has always existed, but Disney suddenly became more sensitive to it. This is probably because WDW has been advertised more as a family vacation, and less like an all-inclusive resort, for over a decade.
The initial discussions involved closing clubs in phases beginning with the least profitable, leaving only the Adventurer's Club, Comedy Warehouse, and possibly one dance club.
Disney threw open the gates to PI as a last-ditch effort to get more Guests on the island. That didn't work, so Disney destroyed the bridge bypass and forced Guests to cross PI as they made their way from the West Side to the Marketplace. Finally, Disney changed a long-standing policy. In prior years, CMs only enjoyed free club entrance on Thursday nights. Now the cover charges are waived six days a week.
If you read nothing else in this ridiculously long post, read this: Don't believe the PR line that Guests don't visit PI because they're too busy enjoying EMH at the parks. The parks were usually open to midnight back in the early 90s, and that didn't affect PI's popularity.
And don't think Disney has thrown in the towel on PI, either. It won't be exactly the same, but there will still be plenty of fun things to do. The locations just won't be Imagineered anymore.