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To me it's a cycle. At times, I enjoy a good old school style JRPG. And like the relaxing turn-based gameplay style.
But after I'm done with a game, I usually like to spend time on a more active kind of gameplay.

I don't think the genre is dead. But I believe the developers need to shake things up a little. The problem is, most of the great JRPG makers (well, most Japanese devs, really) now have an identity crisis. People wish to get a new console Dragon Quest game that rivals the excellent DQ VIII. What do they do about it? They make DQ X an MMO... ¬_¬

In any case, I think it's just a bad console gen right now, where they tried to shake things up in a way that they just weren't prepared for.