Yes, I do believe that customer service is a dying art. In the culture of today in which technology is so prevalent, it becomes increasingly rare that exchange of good be done in-person rather than via a computer. As such, a decrease in direct communication with customers means that the development of customer service skills is in decline.
No, customer service has still a big potential to increase business reputation and profitability. People need someone to make them feel they are loved by the company they deal with, and that's why customer service should work on enhancing/developing different creative ways in which they can attract more customers and enhance their brand reputation.
Customer service is not a dying art, it simply has changed with the times. Friendly, helpful and personalized service still have merit. In fact, some companies base their competitive strategies on elite personalized service. However, many consumers prefer efficiency driven by advanced technology over a thorough face-to-face encounter. To some consumers, good service means a quick, hassle-free experience.
I think there are a tremendous amount of good sales people out there, but the way we treat them doesn't show it. People have come to expect way too much for sales people and if they don't get what they want, no matter how ridiculous, they are quick to label the person a bad salesperson.