Good question.
The line is taken out of context. As I recall, Treebeard uses the first part of it --water, earth, air -- in the book to suggest that the light is returning to Middle-earth (proven correct with the defeat of Sauron).
The film uses it awkwardly, and it's exacerbated with the additional line about no-one now living who remember things that are lost. It's a meaningless sentence which amounts to:
certain things that some people used to know were not passed on to other people and are thus lost to current knowledge. Might as well say:
people die.
In a film featuring several characters with extra-long life, it's particularly odd.