And as video games have evolved, RPGs have been evolving - though they're had a long point of stagnation back in the 90's. Like video games, D&D and other RPGs aren't as bare-boned and low-graphics as their predecessors were. It just seems no one has quite yet hit the magic formula that will draw folks back to the game table in droves. Look, for example how the Harry Potter books put a revival into the young adult book market. If WotC or another group can find the "perfect storm", they might get a surge of popularity they're looking for (maybe actually draw some of those WoW folks to the game and away from their PCs for a while*).
IMHO, I don't think that P&P RPGs can compete with CRPGs if they cover the same ground- the CPRGs have the visual/auditory immersion factor and an instant accessibility (no rules mastery required) that RPGs can't match.
And as the CRPGs continue to attract decent writers, the lack of having to have one guy behind a screen doing all the prep work and being able to game at any time of the day without having to coordinate schedules?
That is a gulf P&P RPGs can't bridge.
What P&P games do best is the face-to-face social interaction that simply can't exist over the Internet.
While Harry Potter is a good example, IME (which may or may not be indicative of the series' overall readership), many of the new readers J.K. Rowling nabbed didn't venture far beyond her protagonist. They didn't become "readers," just Harry Potter fans.
Don't get me wrong, though...
I was just in Generation X in Euless, Tx today- buying Pathfinder, if you must know- opining that I didn't think there was a better time to be a RPG hobbyist.
IMHO, there are more quality games on the market than at any time in the past. Even some of the formerly OoP games of yesteryear have found new publishers and are back on the market. Other games have even found life in multiple game systems.
Simply put...
If you can't find an RPG you like, you're either not trying hard enough, or the hobby REALLY isn't for you.