My understanding is there are several related things at play:

1. The jello effect. So, once upon a time, serving gelatin was reserved for the wealthy because making gelatin from scratch means rendering animal bones. You've got to be rich enough to pay servants/own slaves enough to do that for you. Then after WWII, there was suddenly a mass-produced easy to use product on the shelf called Jell-O. So in the 50's and 60's you saw an explosion in popularity of jello molds because serving gelatin was, to quote a Redditor I once read, "an impressive feat of housewifery." Fancy dishes were similar; prior to WWII, fine decorated porcelain dishes were expensive, after WWII there were factories churning them out, and now Gladys from Topeka could have a floral print gilded gravy boat.
2. Fancy dishes, and housewares in general, were marketed HARD to young women. Macy's popularized the wedding registry, supermarkets started offering catalogs...it was common for young women to receive a portion of a china set for most of her adolescent gift-receiving occasions; Christmases, birthdays, high school graduation...this was the era of the hope chest, an entire industry sprang up for manufacturing pieces of furniture designed for young women to squirrel away a physical dowry in. You just weren't a proper middle class lady unless you could come up with a fancy set of dishes to serve a Christmas dinner worthy of a Norman Rockwell painting on.

So these damn dishes that can't be machine washed were manufactured in the quadrillions; Gramma got really protective over them, she was taught to value them from a very young age, and they're delicate, easily broken, her particular set hasn't been manufactured since the Truman administration so in a way they're irreplaceable, and they must be hand-washed. So only a few Thanksgiving or Christmas dinners, "special occasions" were served on them, and then by the 80's gramma got sick of washing them, boomer dad "remembers that from when he was a kid" and thus they're more sacred than God, God's brother Jod and God's nephew Zhod. To a boomer, there is no occasion special enough to break out gramma's china, it'd be like eating dinner off of the original copy of the Declaration of Independence. Unthinkable.

Millennials, who eat a lot of meals out of paper and plastic takeout containers, have no attachment to those damn dishes and haul them to thrift stores by the truckload.

We actually got a full set of wedding china, and we got married in 2018. We're elder Millennials. While I tell people that they should probably skip the hina, I actually enjoy it. Growing up my parents had a set of china that only came out for company and holidays, and it had a certain charm to it. And I've found our set serves a similar role. I actually keep it in the very same cabinet my mom had when I was a kid (she's long since used a fancier cabinet that matches their dining set.)

But even in 2025, it can be nice to have a set of China. There's just something special about having people over, either for social occasions or holidays, and being able to offer them a really nice place setting that isn't part of your normal repertoire. I do got out of my way to use it though. You could just be stopping by my house for a chat, and if I offer you coffee, I'll probably give it to you in fine china.