Table top gaming is far from dead. Our registry has over 11,000 gamers who have come together most for the purpose of finding other gamers in their area. A quick glance at RPG.net revealed there were some 500 registered gamers online right now over at that site talking to each other. Companies like Wizards of the Coast, Paizo, and White Wolf are still publishing multiple gaming books per month and supporting a host of game designers and support staff. Meanwhile there are a ton of smaller press companies that are successfully making a business of publishing RPGs.
Although I would agree that the industry is becoming more niche, it is far from gone, and I don't think it will be gone any time soon.