It's a sad fact that most blog readers are bloggers themselves, hence why blogs which focus on the blog writing audience do so well. I've had many friends and family members look at me like I have two heads when I show them how much money I make from blogging each week. "Seriously," they say, "... isn't blogging dead though?" The answer is that yes, blogging the way it used to be done is dead.
People who blog just for the sake of blogging are certainly a dead medium. Nowadays you have to compete with a thousand other bloggers in your same niche and the only way to do that is to provide content no one else can or to create a community which will attract even more visitors.
These are changing times but blogging is certainly not a dead medium. You just have to adapt and become a better blogger in the process.