The COVID stuff will pass, at least for the younger musicians. I can't imagine people are going to be testing two years from now. It's just not that much of a risk for otherwise healthy people under the age of 50.
Costs are huge too...it seems like ticket prices have doubled on average in the last five years. Double digit inflation seems to snowball, and the audience won't be going to as many shows. On the other side, artists are going to get squeezed trying to deal with the same inflation issues, but shrinking margins and lower demand due to higher ticket and concession prices.
The mental health (and substance abuse) thing is even longer term IMO. Younger generations have a different mindset than previous ones, for good and bad. I'd imagine there's going to be more artists who don't want to tour because they don't want the stress and challenges. Forty years ago, rock bands on tour were essentially huge traveling parties with all kinds of debauchery. Now that's really not acceptable or desired.
Here's a little story of a band that to me really sums up all the challenges of trying to make it as a musician nowadays.
One of my favorite younger bands is Pinegrove. I saw them in 2016 when they were the opening act playing to about 20 of us at a tiny club. The next show they came through town was a little bigger, they headlined and sold out a 250 cap club. They started to get a lot of positive press and hype, and radio airplay on indie and college stations too. The show after that was a sold out 650 cap club.
Then as they were about to release their next album, the singer was accused of some kind of impropriety, and the band went on hiatus. Basically, he was blasted for sleeping with a consenting adult fan. But in 2018, that was some kind of power inequity dynamic rather than something that happened on any given Tuesday in the 80's. Because he's a sensitive soul, he quit social media, canceled all the tours, and went into therapy. The band was largely "canceled"...a lot of the press stopped covering them and many radio stations dropped them.
It turns out that a third party was essentially blackmailing him, but that's besides the point. The damage was done, especially in the indie/art scene where nobody wants to look like they are supporting a bad guy.
Anyways, they try to mount a comeback. They had released an album during their hiatus and did a tour on it. This time around, there wasn't much press or radio airplay. As part of whatever weird agreement or penance, the band had to hire groups to provide "safe spaces" for anyone who felt uncomfortable (???). They also donated whatever miniscule proceeds they were making on album sales to various charities.
Then they get ready for their next album and tour, and the press is warming up to them a tiny bit, but they unfortunately timed it out right at the start of the pandemic. So they go back on the shelf for another year. In 2021, they try and get a tour going, but with Covid a lot of it got canceled and pushed out. That happened a second time in early 2022, and they've basically been limping through their limited tour dates.
So the band which was once super promising and had a ton of hype and lots of fans ended up getting completely stalled out, and last I heard, the band is planning on "slowing down" so they can finish school and get jobs and have families and all those things.