It just depends on what you wish to accomplish. Yes, quite a bit can be replaced by various set top boxes or other device such as Plex client, Netflix, and so forth. Heck, quite a bit can be replaced by an Android phone or tablet; I'm not up on iPhone and if you can hook it up to a HDTV.
Some things, can done, but just takes more. I find it's a lot easier for me to use all the various online broadband sports packages. The ones I subscribe to are NFL Game Pass, NBA Game Time, NHL Center Ice, MLB at Bat,, WatchESPN, and MotoGP. I use a VPN service to avoid blackouts. Not one STB allows me to use all them. I use my VPN on a STB; one PC limit at a time and I can't share it with other devices via internet sharing. On phones, I can't get as high of a bit rate compared to the PC.
Then there are other online streaming services such as Hulu Plus, BBC iPlayer and so forth. The PC is way easier to access all the video. Hulu is limited in it's Hulu Plus, which is for everything but the PC. A lot of devices, Hulu disables HDMI output that are mobile. iPlayer, need to have that UK IP which can be done on mobile or other devices, but that's dependent on the VPN; some other services such as TVCatchUP block certain ISP that are know to be used by VPN. I'm aware about the licensing issue and not arguing the use of a VPN. But like the sports, the resolution is limited on other devices compared to the PC.
Then there is the whole live TV and DVR playback. Most poeple can use their actual TV for live TV. Some people, like me, have TVs so old they can only use a analog signal. DVR playback is a another issue, especially with copyr once flag which reguires a media center certification if you use Media Center to do the actual recording. And a lot of the media centers are limited in what they'll play or what can be installed on them, which can limit stuff such as XBMC or Plex.
In the end, the PC is just a more robust machine. But they're more expensive. STB are way cheaper and can do a lot. But, it still doesn't eliminate the PC entirely either. Somewhere you need one or a NAS to do the DVR or store your media for XBMC or Plex. You definitely need one to either rip or download your media. It must may not be the one in the home theater, but rather sitting in the office.
It's not dead, it's just evolving.