I don't think we are going to necessarily see genre decay, but we may see stagnation.
MMOs, at least in their current form, appeal to a certain percentage of any market that is aware of them. While WoW is very succesful, and is in many ways an improvement from previous MMOs, there is nothing greatly revolutionary there to my mind- it still uses the same language and ideas that everquest did. However, WoW managed to basically make more people aware of the genre, thanks mostly to Blizzard's brilliance at refinining genres into gold, basically taking the best ideas for MMOs at the time and making them shine.
I do not imagine that people are going to stop playing WoW anytime soon, but unless someone comes up with a very new idea for MMO, I don't see there being a massive new market left for it. A casual MMO, I suppose, might work, but then I might argue that thats a brand new genre.
I don't see why FPS's would die out. Yes, out of 20 releases only 3 were good, but the point surely is that there were 20 releases! Clearly this a genre in which money is to be made, and theres no radical new option to take people who like FPS away from FPS.
The reason adventure games died is because there was a revolution in what games could do, and a lot of people were more interested in these other games. I'm not sure, but I'm guessing that if you look at the figures adventure games never sold more than the first fps', even at the height of their success, so this is why companies weren't interested in making them so much anymore- not as many people are ultimately interested in buying them! FPS's are hugely succesful still, and, as mentioned, have been popularised on the console thanks to Halo.