I think another thing that's hurt them, or rather jrpgs specifically, is hardware competition. Competition's supposed to be good, but in this case I think it really isn't. They lean a bit more towards handhelds, but really they're 5 systems and they're all over the place. If you have a ds you're missing out on psp games and vice versa. Same for PS3 and wii. Xbox isn't competing directly save for some earlier exclusives, but it's still competing for a spot under your tv in general.
The market's split, most developers don't have the money to cross platform and most players don't have the money for 5 systems. Everyone had it a lot better when it was just 'buy a ps2 and you're set'.