I do believe the flight sim area is waning. Here at college the closest thing that kids think is a flight sim is "Battlefield 1942".
All my friends save a few would rather play the flashy, action-packed FPS game like UT2004 or Doom3. They look at me playing IL-2 or Aces High and ask "why?"
I cut my teeth on Aces over Pacific games and it took me away from those action games because it was scalable in difficulty and realism.
Flight sims just don't come out with much fanfare anymore.