It's possible to think of the appearance of flicker films, leader-based films and other materially-linked films produced in the 1960s and 1970s not as a formalist reduction, but as a reaction to the emergence of video as an alternative to film.
If the tendency to produce materially-connected, and increasingly reductive films in the 1970s as an "extension" of Structural Film is considered in relation to the kinds of fornmal claim being made for video at the time, such as David Antin's manifesto emphasizing the ways video is different from film, then the formal explorations of film should not be very surprising.
The problem this poses for artists working after this period, it seems to me, is one of reconciliation: to some extent this has happened through the kinescopic transfer (a technological approach that was part of this period); however, this "solution" is dated. A whole set of hybird aesthetic problems arise for DV that are similar to those faced and explored in the earlier formalist period, but the distinctions that defined the separation: reproduction issues, real time, etc. are both part of DV's range of potentials, and different from it simultaneously.
A new formalist DV is unsatisfying since it would necessarily neglect issues extrinsic to the formal manipulation of the medium.