I don't think the true or traditional RPG will ever die in the video games industry. They've started off strong, declined a bit, made a comeback, evolved and I'm sure they will eventually go back to their roots. There will still be Bethesda-like RPG developers out there who will not sell out and will create a quality game for traditional RPG gamers. I do agree though that many RPGs lately are becoming more and more dumbed-down to action/adventure games (many of which are button-mashers) to appeal to console gamers. I am currently playing DA2 on PS3. I'm enjoying it, but they've definitely removed a lot of the features from DA:O, i.e. Party and Inventory Management, to streamline the game to appeal to a wider audience. On console, let's face it, it is a button-masher. They have a great thing going story-wise, but I don't think this game can be considered a true RPG. I love Bioware but I'm not sure I like the direction they are going with their RPGs. Give me a modern-day RPG similar to the Baldur's Gate series which I fell in love with years ago.
I am a console gamer (PS3 and Xbox 360) and my favourite games to play are in the Fantasy and Role-playing genre. I do own a PC but it's an older one and I play on consoles because I don't have the disposable income to keep upgrading my PC all the time. I know that on a top of the line PC, most games will play and look better. Regardless, I still think games on my console/HDTV setup look pretty sweet and work just fine for my casual style of gameplay. Now, there is a misconception (mostly among gaming PC owners) that all console gamers are ignorant, button-mashing, FPS-playing neanderthals, but this couldn't be farther from the truth. Many of us, myself included, enjoy spending hours upon hours on an RPG, managing our inventory (and party if there is one), buying/selling items, dungeon crawling, exploring, finding hidden areas, and trying to figure out the best type of attack to defeat a certain enemy. We don't just want to mash on a button or perform a sequence of button taps, or explode everything in sight. I'd bet there are quite a lot of console gamers who, like me, were RPG gamers on their PC, long before consoles became so mainstream. Don't know if anyone remembers this game, but I used to play a side-scrolling game on the Commodore 64 called 'Rags to Riches' back in the day
Anyway, my point is that there is nothing wrong with FPS games on consoles, but if you're going to develop an RPG for consoles, don't think that you need to simplify it, because true RPG fans will still be intelligent enough to play your heavy, task-oriented game. If you are going to come out with an action/adventure or FPS game, call it that and leave it out of the RPG category.
For all you FPS gamers out there, don't think that I'm taking a pot shot at you, because I'm not. Those types of games are a ton of fun to play and aren't really button-mashers either. But this thread is about the possible decline of the RPG and I'm hoping that even though developers are going to be catering to other types of systems besides PC, that they remain true to the RPG format.