I don't believe SEO Blogs are on any decline at all, most sites have not "made the switch" and a good percentage of industry trend setters are still rolling out new blogs every day.
I would tend to say that SEO blogs are definitely not the "only game in town" anymore, as SMS services like Twitter and Jaiku play a heavy role in competitive SEO tactics.
A huge trend in most SEO companies (over the past year or so) is to move into social media optimization (SMO for those who don't know) and connect the dots between the two.
I would agree that any company specifically focusing on SEO without looking at the hundreds of influencing factors isn't doing anyone justice- whether it be a client or themselves.
I also don't think the "Web 3.0" concept is anywhere near us... the whole idea of search is still at an infancy, what we see in ten years will be a significant (and perhaps unimaginable) way of finding/sharing information.
An interesting article at information week on Web 3.0 / Semantic Web is here: http://www.informationweek.com/blog/main/archives/2006/11/web30_bombsam.html

