My point is it died pretty much completely. Even if people who played those games eventually got fed up we still have other gamers and newer generations of them. Look at the toy market - same toys are still sold decades later and no one's complaining they shouldn't exist when we have so many technologically advanced devices. Same with QTE's in games - they still exist and operate on the same rules and no one's planning to take them away.
And I still think that pretending to play with plastic instruments could be a good way to get people interested in playing some real music. I mentioned DJ Hero and I'd love to have a try, but the games are only available for PS3 & 360 so I'd have to get an older console and find some well-maintained used game with that DJ set.