Yeah there's competition - in a way Hasbro's own competition is itself I suppose with all the lines they carry now.
But Ewoks/Droids were so much directed at toddlers it seems... especially Ewoks. I felt like it was almost a version of Care Bears... I never bought any of those as a kid. Droids was more my thing, but I only had a couple figures.
Star Wars just seemed to lose a lot of momentum with me after Vader died... I was still into it for almost a year, but I remember He-Man really caught my attention and more exciting to me as a 6-7 year old... but now with the timeline that is starting to really be explored more in Star Wars, it's getting into the era of complete Imperial domination; and we all seem to love Imperials.
And back in the day, I'm sure there were some adults into this stuff but now a huge percentage of the market is people age 25-35, and we have a disposable income to put towards Star Wars stuff. We're reliving our childhood through this and for a lot of people their favorite toys as a kid were Star Wars... and I think that ROTS did so much for Star Wars in appealing to a more mature audience, and unless the next themes are poorly executed, I don't see Star Wars dying down anytime soon.