I don't think you can assign causation and say definitively WHY anything has gotten better or worse. This is my own theory:
I don't think human nature has or is likely to change enough to account for the lowering in rates of stranger abduction and abuse of children. Maybe the reason the rate has decreased is because the children are less available to BE abucted or abused by strangers - precisely because they ARE made less available because they ARE always insulated inside their own homes.
In terms of the childrens' health, I don't think this is a good thing. But I also don't think that kids stopped playing outside primarily or solely because their parents are afraid of them being abducted. If you think about WHEN the rates of child abduction and sexual abuse began marching steadily downward (1990's) and the rate of childhood obesity began marching steadily upward (1990's) that pretty precisely coincides with the rise of video and computer and internet activities that became widely available to children in their homes (1990's).
In terms of kids walking to school - again- when the majority of kids were walking to school, the majority of moms were staying home. Now a lot (I don't know if it's the majority) of moms work. So a lot of kids are dropped off at school by the mother on her way to work. That means there's not the benefit of a group of kids walking together. I think a lot of people have made the choice to drive their kids because there are no other kids for their kids to walk with.
In terms of my own feelings or fears, when my kids were little, I lived in a neighborhood with a lot of kids always outside playing, (even though it was the 90's and 2000's) . I knew the parents, etc., etc. and so my kids were allowed to play outside with their friends on their own.
I wouldn't be comfortable with that today. Because kids don't play outside anymore so there's no longer that group effect.
The last neighborhood we lived in - when both my kids were teenagers-I'd walk through it on a beautiful summer afternoon and you would hear nothing but the whir of the air conditioning units. Pretty sad- but again- I don't think it has anything to do with fears of child abduction. I think it has to do how a lot of kids find it preferable to spend their time these days- and that might be intensifying because they're obese and out of shape - it's a vicious cycle.