Super mario galaxy is the 3rd highest ranked game ever and sold amazingly. Hardly seems like platformers are niche. Just less companies are making them. At the same time, Banjo kazooie, LBP, SMG, NSMB, Ratchet and Clank, braid, N+, kirby canvas curse. Seems like there have been a lot of high quality platformers recently.
Why is it becoming less popular? Just like at the title of the genre - platformer. An entire genre dedicated to the act of jumping. It's not exactly easy to make exciting.
Besides surely we can take games like Prince of Persia and mirrors edge to be the evolution of the platformer.