I think there are two main reasons behind the decreasing word counts of stories. The first is the perceived reduced attention span of readers. There are clearly more demands on a reader's time these days, and shorter stories are welcomed as a result. These demands range from work and home based commitments, as well as the increasing proliferation of stories online. In the days of Jane Austen or Charles Dickens, there were not only fewer authors available, there were also fewer formats for literature, and also fewer things for the leisured upper classes to do. These all combined to provide the opportunity, and the option, to read much longer stories. It's hardly a surprise that many of the books written before even the 1950s can often take longer to get started, since readers were not so inclined towards 'instant gratification' as they are now. Perhaps the demand for 'bitesize' options stems from the desire to consume fiction between activities?
The second perceived reason is that of the reduced attention span of the writers themselves. They too have more demands on their time, and when we're constantly being urged to make as much work available as possible, we can feel harassed into producing more work that is shorter in length in order to satisfy demand. Moreover, word counts are less of an issue in a purely electronic format - a reader won't pay £8 for a 30,000 paperback, but they'll happily pay £2 for a 15,000 collection of short stories. Tied into this is the possibility that we're being slowly conditioned by the format of television or film narratives to except stories to delivered in a faster format.
As I'm odd, I worked out the word counts for my last eight Friday Flashes. They range between 121 words for Silhouette, my most recent offering, to 979 words for The Jar By The Door. Only three of the eight are less than 500 words long, and all of them are longer than 100 words. The average is 555 words per story. I'd conclude from that that I simply write to the length required by the story. Will I always do so, or will I start writing shorter stories?
Only time will tell...