The reason why people are talking about blogs becoming passe is mainly because of the advent of microblogging services. Oh well, the microblogging service, aka Twitter.
Okay, I'm on twitter as well. But I dont find any competition from Twitter to blogging sites such as Wordpress or Blogger. Both are very different at the outset. Twitter is more of a slow chatting sort of a thing. And a fad as well, considering the number of celebs who tweet. Blogging in my opinion is more of an articulate thing, and it requires a dedication. You cant just blog for a month and get tired of it. These are the differences I have perceived.
Blogs have certainly becomes more commercial these days, and that perhaps this has caused the creative type blogs to take a backseat. Most of the "featured" blogs on Wordpress are the ones belonging to big corporate houses or news studios/services. But the thing is, even when a blog is unpopular it just means its being read by fewer people, but being read all right! Personally I would prefer my work being read by few people than not being read at all.
Finally, I sincerely hope blogs live on. This is a way of expression which is unique. Let us not kill it.
You could check out this link I found while browsing: my 2 cents: Is blogging passe?