PS2 support dropped. Linux support dropped. It's dropping more features than it's adding. All that's left is blu ray. There are some exclusives I am interested, but I don't really have time for all the good Wii games not to mention 360 games.
When the PS3 came out I was interested in it and planned to get it eventually, but I have lost interest and so I'm less likely to buy it now even if the price drops than I was several years ago.
Dead, no... However it's not likely to go beyond third place...