I started my own ID consulting studio this year. After fretting about it for years and making a business plan, I took the leap in April. I’ve already got two contractors working for me regularly and a back log of projects into the new year in branding, design strategy, design language systems and traditional ID.
I’m saying this as a point of reference. Physical design is not dead. I feel for you, and it sucks that you are in your current situation. Assessing the field incorrectly isn’t going to help. There is work out there. I know it is hard to make an honest assessment of why you aren’t getting work. If there is someone you trust who can give it to you straight (and if you have the ability to hear that), I think that would be helpful.