They're existing, not really thriving. Artisanal things have become more popular as a hobby, but even people who get into them commercially rarely make real money off of it. The demand exists, but purely as a novelty for people who appreciate those types of things, or perhaps in really niche sub-markets that aren't adequately covered by big businesses. But the artisans aren't directly competing with companies that provide similar goods to them at scale, because it's simply impossible. They've just carved out a niche and sell the experience or the tailoring of what they're making to the small slice of the population who's willing to pay for that.

You can't do this with software. Non-devs don't understand nor appreciate any qualities of software beyond the simplest comprehension of UX. There's no such thing as "hand-made" software. 99% of people don't care about what runs on their computer at all, they only care about the ends, not the means. As long as it appears to do what you want, it's good enough, and good enough is all that's needed by everyone.

The problem for software artisans is that unlike other handmade craftwork, nobody else ever sees your code. There's no way to differentiate your work from that which is factory-made or LLM-generated.