Short answer: No, JRPGs are not dead and they never were.
Super Long Answer: We really have to define when a genre is officially dead. It can't mean that no games are made in that genre, that would be too strict. If its more of a quality thing, then I might have agreed with you a couple of years back. Right now though, they might be making a comeback.
Last generation was kinda terrible for JRPGs on consoles (the genre never died on handhleds, thanks to the DS). Sure you had a couple of games that bucked the trend like Ni No Kuni, Nier, and XenoBlade but they were the exception on consoles. The 360 kinda looked at first to be the JRPG system when stuff like Infinite Undiscovery, Last Remnant, Blue Dragon, and Lost Odyssey were announced. But none of those games really took off, either because they were not what the JRPG crowd was looking for, or because they were actually kinda terrible. The PS3 didn't see many JRPG releases that really set the world on fire (at least in the west).
Sure there are series that were competent at their niche still going (The Tales and Atelier series come to mind), but those aren't going to be the series that change people's minds about JRPGs. The series that could have invigorated the JRPG base, Final Fantasy, didn't really get the acclaim it needed to pull that off. (Oddly XIII is still a controversial game to talk about for some reason.) Another series that gained a lot of momentum and may have been able to get people excited about JRPGs, Persona (and SMT in general), were nowhere to be seen on consoles until fairly recently.
However, JRPGs are not dead and never were. They keep on getting released implying there is enough of an audience which allows JRPG production. We also tend to ignore the handheld scene for some reason, since that platform has the best selling JRPG series of all time, Pokemon. Friggin Chrono Trigger and some main line Dragon Quest Games were released on DS. Heck I can't believe no one has mentioned The World Ends With You in this thread. Currently, we have stuff like SMT: IV, Fire Emblem: Awakening, and Bravely Deafult.
Are JRPGs ever gonna achieve Final Fantasy 7's status again? Probably not, but that is OK. By my count JRPGs are alive and kicking.
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