Don't blame KH.
Now that's over and done with. I think a lot of it has to do with the shift of focus onto other genre's, namely Shooters and WRPG's. But we can also blame the genre for not re-invigorating itself, which is what happened to platformers, the genre got stale and it needed a Super Mario Galaxy 7 years ago to revive it, but it got Sunshine instead.
Similarly, JRPG's got DQ8 when what it really needed was Persona 3 or 4, and a Final Fantasy 12 (which split the fanbase right down the middle) when it needed something as good and as fresh as FF10. So if anything, blame the games that were released in the last 5 years for making the genre feel stale.
This point was driven further by Blue dragon and LO. Both decent JRPG's, but neither were mindblowingly new or epic (case can be made for LO's story though) and so the genre got two new editions that felt like rehashes.
Not to mention some substandard JRPG's popping up from time to time (Last Remnant, Infinite undiscovery, Enchanted Arms), the genre starts showing it's age because these games fail at providing something new that is actually fun and challenging.
fingers cross FF13 does something about that, because aside from another game from tri-ace, I don't see any other JRPG on the horizon that breaks the trend of either being average JRPG that sticks to conventions or trying something new and then falling flat on their face (that includes WKC and DQ9 by the way).