I think it's more consumers gravitate to fewer different titles now, possibly a result of online gaming becoming so big this generation?, most people get CoD or Halo or whatever for the online component, and naturally their friends then get the same game so they can play together.
You don't buy CoD if your friend has Halo and you want to play online together. Previously you'd have both bought a different game and shared them.
Add in the massive increase in game development costs for this generation over the PS2 days (which again were a huge leap over PS1 days) and even the same sales didn't cut it like they used to.
Niche games were either low budget, and so failed to sell as, well or publishers took a massive gamble on them and if they bombed on AAA budgets, dragged the entire company down with them.
Indie gaming is really just filling the void a bit, though as Kresnik says, they're generally not filling in the void of genres I love to play (arcade racers and platformers in particular have taken a pounding this gen) and are generally filling in the void created in the change in tastes in the 90s when games moved from 2D to 3D.
When "Indie" gaming is generating the revenue levels seen by the B games in their prime, maybe I'll agree more. But as it is, "Indie" games are just for the most part low budget games that can be bought much more cheaply, and so are given more of a chance.
Don't get me wrong, I'm loving this Indie boom on Vita as it's pretty nostalgic, but they're still a completely different thing to the B games that have long since vanished for the most part (the experimental games with a budget behind them, or a more specialised games).