I read a post this morning in the reading room about how contributions to Wikijunior have decreased in recent months, a trend which may be partially due to the removal of the "Wikijunior New Book of the Quarter" (WNBOTQ) advertisement from the main page. We are working now to replace that advertisement, in hopes that better advertisements will attract more readers and contributors.
What we really need to do is attract more readers who are willing to write books for children. Wikibooks has a policy about allowing allegory if it is instructional, so people really can write some cutesy childrens storybooks so long as they teach lessons in the background. Get together with a good illustrator, and we could be putting together some world-class childrens books.
Another issue, although I doubt that this has anything to do with the lack of contributors, is that wikijunior books aren't "safe" in that people can still vandalize them. Once FlaggedRevs is installed, we will have a good first line of defense against this, but it won't be perfect. The optimum solution might be to try and move forward with book publishing, something that we had tried to start in the past but never took to the next level. With enough publication-worthy books on Wikijunior, we might just be able to start it up again.