I think the genre either needs to change or it will die. Xenoblade is a great example of a Japanese RPG for the 21st century. It has all the quirkiness and story tropes of a JRPG without the tedious random battles or turn based nonsense that only Japan seems to prefer in great enough number to warrant further releases.
I don't think the traditional JRPG will die completely. I do think it will shrink to the naturally small niche genre that it was before Final Fantasy exploded it's popularity. WRPGs have taken the place of JRPGs and I don't see that changing any time soon.
I think what people really like about JRPGs is the Japanese style in character design, plot, etc. I don't think that the majority of JRPG player that came into the genre with FF7 are totally in love with the JRPG gameplay. Japanese devs need to fine a balance between Japanese content style and Western gameplay.
