The horror genre in general isn't dying but the answer is twofold.
1. from an Hollywood PoV , its pretty much dead .... Hollywood is still stuck in the 80s with the "slasher movie" mentality. The 80s were a great decade for the genre in Hollywood with Jason , Michael Myers and Freddy taking the lead damage in horror blockbuster movie. 90s were stale ( some hits *wink wink Scream* , most misses ) , 00s were full of hommage , adaptation and remake ( yes J-horror was cool when the original was out in Japan 4 years ago and 70s/80s movies were excellent in the 70/80s, Hatchet was good but still an hommage to the 80s , the first Saw had a good gory twist ).
2. from a non-Hollywood PoV , it's still thriving. One of the reason is that outside the "Hollywood system" , directors make the movie they wanna make for better or worst. Blair Witch Project & Paranormal Activity are very low horror budget horror movies but that 1-2 scare they give you is very much worth it ( imo that's why they worked). The big picture still lies outside out the USA tho . Im sorry to say this to all my american friends but Hollywood has got everything to gain to keep the competition out of their territory ( start with $ and ends with $ ) .... they can inject 100M$ to buy the rights to do a remake but they will never capture the original director view of the movie. If you think the 5-6 J-Horror movie remakes were "awesome" , i dare you to watch one that hasn't been remade yet ( like the Audition
from Takashi Miike ). Another example would be the original "Let the right one in
( yes that one has been remade but im pretty sure you didnt see a close-up of Chloe Moretz's "sewed horizontal pussy" in that one )
My point is that option #2 directors arent gunning for the "scare-a-minute" record , they just write a relatively good story and place a good scare here and there. BTW those scare works.
On that note , i will admit that Scream 4 was better than the 3rd one but the ending really wasn't great ... so Scream 1 > Scream 2 > Scream 4 > Scream 3