"because people only want jazz in the small little shoe-horned version of it they have in their mind "
Cappybara makes a good point.
Jazz is a very big tent, with a great variety of styles that can fall within its definition, but many folks define it quite narrowly. My parents dug swing, but be-bop didn't do it for them. If you are a trad-jazz fan, Metheny ain't your man.
But all the categories are timeless, and recur in our music landscape in a cyclical way. A new Hollywood movie or Broadway show containing any of these will spawn derivatives on the field and guard floor almost instantly.
"Pop" jazz is the entry drug: Vince Geraldi's "Peanuts" score, Mangione's "Land of Make Believe", Maynard's "Rocky"...etc. all produced a new awareness of the form and led to broader popularity even of the more complex styles.
Another factor is that, generally, most current corps show designers are not as exposed to jazz (in all its forms) as they would have been 40 years ago. It's just not on the current media landscape to the same extent.
When I worked as staff producer for Concord Jazz records in the '80s, industry research regularly compared categories like Pop, Rock, R&B, Country and Jazz with reference to commercial market share. On the weekly pie graph, jazz accounted for about 5%, and this was at the height of Chuck and Chick's popularity.
That said, the art form always had a far deeper influence on our culture than record sales alone can indicate. Besides, as we all know, "Ellington is Forever".