Gaming is not dead; at my local B&N or Borders, there's some books--mainly for D&D, whatever Star Wars and superhero games are current, and probably for the horror-related flavor game (Vampire the Masquerade, and such). Hobbytown USA has a generous supply of gaming materials, down the middle aisle at the stores I've been to, and they tend to follow the B&N and Borders model. Mainly I shop at used bookstores.
I do believe that collectible card games did swallow a big chunk of the RPG market. That was why Wizards was able to sweep in and gobble up D&D and release 3.0. PC games and videogames also took a big chunk out of the market.
There are a few game shops in town but I haven't been to them in a long time. The last one I visited was a shop with both CCGs and miniature games like HeroClix. I had wondered if that might mean the market might go back to miniature-based wargames and then back to RPGs in a cyclical fashion.
Traveller does have a lot of issues, unfortunately. The one biggest I think is the constant turnover of game systems, from CT to MegaT to TNE, and then other companies taking over from GDW with T4 and MongT GurpsT and Hero. In comparison to D&D; every new version of D&D had a whole lot of products to help bring the game to its new version. It doesn't seem like that happened with Traveller for any new version. And when GDW was doing its (in)famous releasing a new product every 22 days for 22 years, that was good for the company but far too spread out over many product lines and fields. Their main support was JTAS, and then they did the opposite of what the makers of D&D, Warhammer, and even Star Fleet Battles did: they turned their house magazines into house products only (not so much general gaming helps) -- and in the case of SFB, began a product that was SFB-specific in their Captain's Logs supplements; meanwhile, JTAS turned into a general gaming mag for their products--Challenge--and they expanded their other lines (witness the mushrooming of Twilight 2000 and Dark Conspiracy Traveller 2300 and Cadillacs & Dinosaurs and them going through different editions, too!) Too much development was done by 3rd party publishers, and while there was lots of good stuff, they were doing the lion's share of creativity for Traveller.
For better or worse, this swung much of the SF RPG market towards the various Star Trek and Star Wars games. I just wish Traveller was as strong as D20 gaming in general is...
Gordon Long