Kids don’t collect butterflies so much anymore because (a) most people live in more urbanized places than 50+ years ago and kids spend more time indoors or in structured activities, and (b) there are a lot fewer butterflies around, as they die to insecticides, habitat loss, and climate change.
Edit: A web search turns up that butterfly populations have declined by more than 30% in Europe/USA in the past 25 years or so, and were in decline for long before that. One estimate is that they have declined by more than 80% in Western Europe since the late 19th century, with many species disappearing entirely.
Easily capturing images of butterflies (or just downloading them) probably is a factor, that wasn't really possible with cameras children had access to 30y ago.
Raising butterflies is quite a common class project in UK primary schools.
We live in the middle of a city (San Francisco) and there are lots of butterflies around. There may be less, but I stand by my theory that the main difference is that killing bugs as a hobby is not seen the same way as it used to be.
Edit: A web search turns up that butterfly populations have declined by more than 30% in Europe/USA in the past 25 years or so, and were in decline for long before that. One estimate is that they have declined by more than 80% in Western Europe since the late 19th century, with many species disappearing entirely.