In the U.S. and Western Europe wrestling has lost alot of the support it had a century ago (when it was one of the main sports of that era) to other things that TV viewers find more easy to watch and understand.
In the 18th and 19th century wrestling was one of the top 3 sports in Western Europe and America. George Washington wrestled as did Abraham Lincoln, Ulysses S. Grant, Theodore Roosevelt, and many many other top members of American as well as European society. In the first half of the 20th century a number of new sports like American football certainly rose and overtook it, but it was still considered the most manly of the sporting endevors so you had the likes of George Patton, Norman Schwarzkopf, Dwight Eisenhower, John McCain, and many other names people know all too well who wrestled.
Then Title IX managed to do a body blow to American wrestling. By mandating equal numbers of men and women in college sports it created a situation where the most popular male sport which took up a huge number of male slots (Football) was not going to be cut so schools had to make more female sports teams and/or kill other male sports teams and wrestling in colleges around the country took a massive hit. That has been slowly turning around by the way as more schools have of late been bringing it back as things like female wrestling teams have started to take off allowing schools to comply with Title IX and have male wrestling at the same time.
The other biggest problem wrestling has had in the second half of the 20th century to now is that its not as sexy to watch on TV (where the big money is) for your average viewer as most other sports are because most people don't know the rules and in a fast pace sport like wrestling if you haven't done it yourself and don't know the rules it just comes off like men grabbing each other and rolling around.
Ultimate Fighting though is simple enough for the layman to understand which is why its popular on TV in a way real wrestling is not right now. Oh and Professional Wrestling is a joke that is half acting and half soap opera. But, its easy to understand for the layman when a person calls out someone else as a wuss and starts macking on his girlfriend and then gets hit by the other guy with a chair in pre-staged acting routine.
That said wrestling in the Middle East, Africa, Asia, Eastern Europe, and even large parts of South America is still extremely popular. It doesn't take the resources to do as golf and many other things popular in the U.S. and Western Europe. What the IOC is thinking about is TV ratings in the U.S. and Western Europe which is where the big money comes in. They don't give a damn that wrestling is one of the few sports done just about everywhere and that is one of the top sports outside Western Europe and the United States.