I think the relaunch of Monkey Island on the iPhone proved that adventures are far from dead. Are they still mainstream? Maybe not, but I definitely see elements of adventures in modern games. Games like Fallout 3 and Bioshock rely heavily on storytelling. You could argue that some sandbox games like GTA San Andreas (haven't played IV, sorry) are technically adventure games or have adventure components. While I think the point and click (and text-based IF) adventures of years gone by are no longer mainstream, to say that it's dead is like saying that RTS is dead because there's no more fixed-view overhead style Command & Conquer games - they've just evolved.
The more I think about it I think you're right, but if you look at the way that games are made now, the costs and the audiences they have to reach, making a highly cerebral adventure game is quite risky. I don't see EA ever doing it for example.
I can see adventures working well in the casual gaming space, but I think that the mass appeal side probably needs to be there too.
