Ummm....gooood question. I guess it comes down to how we're defining survival horror as a genre.
I think it's good to be able to define a genre, helps genre's from being meaningless descriptors.
TO ME (and I think it's a good description of the genre), survival horror is a subgenre of the action/adventure genre, in which supplies are purposefully scarce and controls are purposefully designed in order to give the impression of being a (more or less) ordinary person in the world, which leads to (hopefully) tense and at times frightening gameplay. Obviously the storyline more often than not deals with horror tropes.
Yes, there are still survival horror games being made. It's up to debate however if they're good or bad. Silent Hill is still a franchise popping out games that in my opinion are hitting the survival horror mode...
I think it was a genre that saw it's most popular days when 3d was the new thing, and ideas as to what constitutes as good 3d gameplay varied. Today I think people are very limited in what they think is 'good' gameplay. It's argued over and over that Survival Horror is dying as a genre because it has bad gameplay, I'd argue that the gameplay isn't bad, but inhibited. How can it be bad if it's serving it's purpose? It's doing exactly what it wants to be doing, which is the opposite of what most action adventure games are trying to do (empower the player). SurHhorror as a genre is trying to make the player feel vulnerable, to heighten tension. Saying it's bad gameplay is like saying Zelda: Wind Waker has bad graphics because it's not realistic.
In contrast, you can give me an incredibly challenging game like Ninja Gaiden, make the enemies and world 'scary' and it wouldn't be as effective as Silent Hill 2. Because I feel empowered as Ryu. I feel vulnerable as James Sunderland.
Sadly, people are stuck in this mode where they see one good way and many bad ways to make 3d action adventure, which is limiting the industry. People should learn to appreciate SurHorror for what it is, and not for what it's not, and maybe the genre can thrive again one day!