Ian T mentioned G1MRA, and I can confirm that the steam v. electric debate does rear it head in that group from time to time. The electric loco owners sometimes feel the live steamers believe themselves superior. That's an old chestnut in any gauge, of course. It's not as big a debate as you might imagine, though.
Because G1MRA is the nearest of the ME gauges to the model railway camp, where everything is electric irrespective of the model, there is much more interest in model railways as opposed to simply building a loco and runnign it on rails. So scenery, coaches, and the whole environment is involved, and that brings other aspects to the modelling. Aside from the Gauge 5 Ground Level Association, I see no such interest amongst model engineers.
There is no doubt that we are headed towards a future in which there will be an increasing proportion of steam outline models which are electric powered.
As Chris Parsons notes, electric aircraft have been largely accepted and there is no real issue there, apart from shorter flight times.
I tend to feel that a model should be true to its prototype, with a steam outline loco being steam powered, but the advantages of the electric loc are very considerable.
Gauge 1 locos, both steam and electric are often radio controlled, and they are much further down the road of RC control than the other gauges. I think we are missing a trick, here.
In the larger gauges, the other big change that may come with electric power is much more Modern Outline locos.
We are seeing this already, and I believe it is the beginning of an explosion which will change the hobby. Some won't like it; while others will be drawn to the hobby because of the modern outlines. Those are all post-steam locos anyway, in real life, so the power unit matches the prototype.
I think steam is becoming less popular because of cost, and because of regulation. I am not sure we can do much about either.
What is apparent, from aeromodelling and from model boats, is that there are lots of people out there who will find the hobby more attractive if they can buy a ready-made electric loco and get going quickly.
Unlike aeromodelling or model boats, though, those new entrants still ned to use a track. Gauge 1 and, I suspect, gauge 3 have a greater prevalence of private tracks. That's not true for the larger gauges.
I suppose it all depends on what you want from your hobby. I like to make things. I would hesitate to make an electric powered steam outline loco, but I am happy to admire any model that anyone has taken the trouble to make.
Marcus