Small talent pool despite huge population (???)
To me that's the biggest reason and there's several reasons why our talent pool is so small compared to countries like Russia.
Awful scouting and No development system.
Yes. But like another person already said: There's only so much that can be done if there isn't a lot of talent to scout or develop in the first place.
The problem with Learn to Skate is it is discouraging. I've seen kids who taught themselves to do an axel on the ice, but no no no, can't move to level 3 Basic until you get that mowhawk. Can't do the spiral? Gonna have to hold you back.
You also have internet armchair analysts that scream bloody murder if you're not a "well-rounded" skater according to their standards.
And then, after Learn To Skate-boom, into expensive private lessons and the Wallet Shock.
In Russia it seems kids are grouped by age, taught in groups, (long past basic skills groups) and the kids seem to be having a heck of a lot more fun. But skating is a larger part of Russian culture.
We used to have group lessons for FS levels at our rink when I was a kid. This is when the rink was still ISI and not USFSA. But this was 2004 and probably part of the Michelle Kwan boom.
I remember having a lot of fun in the group classes, even though I was "too old" compared to all of the other kids in the group. But it had a competitive vibe because everyone was trying to do an element better than the rest of the group. All of us still took private lessons because we still needed that individual help, but the group element helped drive the competitive spirit to improve. At least for me it did, since I was too old to be friends with any of those kids. I'm sure the friendship element for them helped them stay though. I see this all the time in my ballet school and the owners/teachers know it. They'll put kids who are pretty behind in more advanced classes because they're trying desperately to keep people in classes based on age. If they absolutely do have to put them in a lower level for awhile, they bump them up to the proper age group as soon as possible because they know kids LEAVE if they have no friends in class and they're only going to make friends if they're with kids their own age. There's big population difference between the ballet studio and the rink. The rink has a big LTS population, but after that, we're pretty damn small. We just don't have the numbers we had in 2004 to really form any age-matched and skill-matched group classes. Whereas the ballet classes are overflowing with kids (even with multiple schools in town to choose from). Before someone screams
"expenses!", as someone who is paying for both ballet and skating stuff, the skating stuff in my area is Waaaaay cheaper than the ballet stuff. A huge part of that is my rink is very cheap. I think in a big city, the rink/coaching costs would equal the ballet costs. The ballet school is charging normal rates, but my rink is severely under-charging and yet we still have a tiny population of skaters. Ballet is popular, everyone knows about it. Figure skating is that weird step-child hidden behind hockey that everyone forgets even exists. Any of those millions of people paying for a great ballet education could have used that on figure skating instead, but they don't. And maybe that's partly opportunity. In ballet, you can potentially join a company as a dancer and get PAID, but ballet dancers retire young too. It's not a life-long career unless you become a ballet teacher. And dancer pay is terrible, you can't survive on it alone, so dancers aren't really choosing a great career that ends soon and pays terrible. It's not much different from figure skating, but it's still a very popular choice to become a dancer and join a company.
I'm not strictly talking about why we don't have more champions, but why we just don't have a larger pool of skaters to select from at all. I know it gets more expensive the more you compete, but figure skating just isn't that popular to begin with, even at a more recreational level.
In North America we don’t really care if we don’t have a champion contender year after year.
Well I care, but I guess the rest of the USA doesn't.
And I care about them deeply.
I am also glad that the young Russian ladies formerly known as the three A's shot into the sky in a burst of fireworks -- and that more of the same is on the horizon with the next crop of prodigies. 
