It's a small school problem as well, here in NW Ohio, there are routinely 2 quarter JV games. LIke it or not, this is a gender issue as much as anything. There are parents who'll be all over a boy who quits a sport and not say a word to a girl who does the same thing. Actually, some parents are happy if their kid doesn't play a sport. There are also other reasons why...
1. club volleyball/ indoor track - for some reason these came into being about 15 years ago and it's full blown now. Obviously the intent was to have those kids who DIDN'T play basketball to play during their off season. The by product is some who played both chose the other sport over basketball
2. difficulty. Basketball is a much tougher sport to play. You have to run, you have to "touch" the other team. You get knocked down. Many girls simply don't like those aspects of the game.
3. length of season. I don't buy this one as much because kids will play volleyball for 9 months a year. I do think girls, who've come off a 3 month volleyball season, are not that interested in going into a 4 month basketball season. Spring sports? They are really dying.
One solution I have is to eliminate the "quarters" rule. This wasn't as much of an issue when you didn't have this rule. Leaders decided coaches were not capable of managing their players time so they instituted this quarters rule. That essentially paved the way to 2 quarter JV games, or no JV games in some instances.
Another solution is to offer some kind of PE credit to athletes who participate in a school sponsored sport. Call in bribery, but if you can get another 2 kids out per grade just because a grade is on the line, then so be it. That's another 8 kids and boom, you've got plenty.