Big hit for alcohol production isn't only prohibition but Great War. Rye was in high demand as feeder for animals and food and supply was heavily hit by cutting access to rye from Europe, Canada and Australia which was major rye producers back them. USA as neutral nation prior to 1917 become global leader in rye production and one of few countries which allow rye export. When USA enter war in 1917, as nearly everywhere federal government start pushing to reduce rye consumption for front needs, including using rye in alcohol production. Grain instead alcohol production was sent to feed US allies in Europe and ever growing US Army needs.

High grain prices kill distilleries and breweries profits. BUT, Kentucky distilleries produce bourbon ie corn whisky. Corn compared to rye wasn't that much widely used and popular outside Americas, so their prices was much lower and pushing to conserve corn was weaker compared to rye. Kentucky distilleries had much more available and cheaper resource to produce their corn whisky compared to rye whisky from Maryland or Pennsylvania.

During prohibition consumer tastes change. Prohibition cut access to american rye whisky which are more bold and spicier in taste. Smugglers start moving drinks lighter in taste like gin or vodka. If somebody want a whisky, he probably had access to canadian whisky. Their special trait is fact canadian distilleries they were distilling the grains individually. The purpose was to give distillers better control over the flavor profile of the final product, and more blending options. Canadian Whisky producers discovered in the early 1900s that they could get the most flavor variation from distilling some grains individually and then using the separate distillates as part of a wider flavor palate. This was thanks to the enzyme technology they developed in the early 1900s to help them distill the grains that didn’t have great enzymatic potential on their own—mainly the corn and rye—without the addition of malted barley. This unique production process also decreased their production cost and wider taste palate make them less bold and spicy in taste. Smugglers also make nice profit on smuggling whisky from Scotland, especially "blended" whisky which are cheaper in production and considered as more premium stuff in USA.

US distilleries which produce rye whisky at the end of prohibition was already out of business and distilleries which still produce them had a product which wasn't popular. But sweeter and lighter bourbon perfectly fits post-prohibition market. After WWII bourbon and tennessee whisky due to USA cultural prominence become popular outside USA and what left from rye whisky in USA was nearly forgotten.

Not really historical but bourbon specifically got a big boom maybe 7ish years ago. Just since then the amount of new products that has come out has been insane. From what I understand before the boom whiskey sales as a whole were down, and when bourbon hit rye get much attention. Things are looking up though because there's a lot of new ryes coming to the market. Most are from bourbon distilleries but I think as those get popular so will Maryland rye. Hope that helps!