I guess the problem with the space shooter genre is the requirement of a joystick. Many people don't have a joystick and it's not really fun to play a real space shooter with mouse and keyboard.
Freelancer did this pretty well, but in my eyes it's no real space shooter.
Well... anyway, I'm pretty sure EA will revive the Wing Commander franchise some day. With a small budget of course. Many fans will buy it, bu it will be bad. I'd probably buy a new Wing Commander too... even if it's bad.

Why did the genre die?
My answer: First-Person-Shooter
But the FPS genre will die next. There has just been too much of it. Even FPS fans start looking for some other games. Did you notice the small revival of the Adventure genre? And I'm pretty sure there are also more RPG in the works than a few years ago.
The Space Shoother genre shall rise again!
