I don't know if you already watched the anime だがしかし, that the story goes in a cheap sweets store in a countryside city in Japan. You know, I think this is maybe an awesome place to have a good time. So, for who knows, this is really a common place in Japan?
I have seen the show, but it's been a very long time :D
駄菓子屋 do exist, but they're way less common. I think it's thanks to convenience stores and supermarkets selling many of the same snacks, but don't quote me on that. Also the aging population and general urbanization.
Edit: I guess they're considered pretty レトロ at this point. I'm sure you could still find them though.
I am certain you can find them if you look hard enough, but it is pretty much a dying thing. It was still prevalent around my era, but with many seniors unable to do the task they've become more of an attraction spots in places like Odaiba or certain shopping malls.
Can never spot them and if I do they're just closed.
