I love the band function, it allows people to work on things and upload stuff to the open when it is ready and/or worth uploading. It also allows for more honest opinions to be shared in a trusted environment than in the open forum where any slight critique is unwanted, or has to be heavily sugar coated as not to cause offence. Regarding the "cliquey" thing, I don't think the band function is particularly "cliquey", it's just a group of people doing music. On the other hand even before the band section was popular there were and are cliques in Wikiloops, if you like it or not. And whether it is intentionally or not.
I think the band function on Wikiloops is unique, I haven't seen one like that, and I hope it will be developed further. There is place for both band and regular section.
And finally, I think I have to agree with Dick, there is a drop in activity sometimes due to seasons , same as there is more happening on the weekends or evenings. One thing that has changed I believe is that now there are so many more users, and often so many more songs you can't listen to them all. I try to listen every day to the "new songs" feed at work, but can't always "like" them. But at least I am listening...