That may be true, Mike, but there are many people who collect old movie and film equipment. To someone who collects such things, such a find could have plenty of value.
Indeed, yes i do, Iceberg, i love it - but am all flabbergasted, quiet and wide-eyed as this facade event is so difficult to understand; all fixed up dear -
and behind it crumbling, tumbling down, rotting, juicy lush wild wines thriving growing galore - weirdest happening ever! Cool gallery.
Interesting they didn't use the original holes for the replacement neon.
As to why the place likely went under, it's all but impossible for a single screen theatre to survive these days. Actually, it was almost impossible even 30 years ago when so many were closing. It's hard to get film. The investment for modern projection/sound is high (even the move from carbon to xenon lamps which didn't happen here and forget about the move to digital).
You also saw a lot of cases where the owners got old and retired/passed and there was no one who wanted to take it over. It was a lot of work and after the 50's - 60's it wasn't easy to even break even. You saw a lot of older couples running local theatres as their retirement hobby...
The cardboard must have been put there after it closed or when some final maintenance (like oiling) was done. Cardboard there when the lamp is running would have been burned within seconds.
I know we all hate to see this kind of equipment rotting away. While old theatre seats and similar customer facing items have value, old projection equipment is essentially worthless. There isn't a single item here that would be of any use to a modern (or even less than modern) theatre. Most of that equipment is so heavy it isn't even worth hauling out for scrap prices.