It's normal to see a decline of hip hop eventually. It's not just a question of music being downloaded.

You can only hold the mass' attention for so long.

Every type of music becomes extremely popular for a given period and then fades out to its normal fanbase. 80s saw metal rise... 90s saw pop punk/grunge be hits...

But to say that it's dead is stupid. Just like metal and grunge, the really good artists are still arounds, while the shite died out. Same will happen with hip hop, the good stuff will remain, the crap will die.