All too often, when someone who is not liked by another meets tragedy, this is labeled as Irony. This is often incorrect. There's a song that describes some very ironic situations. Having a cigarette break in a no-smoking area is ironic. Dying in a plane crash after 30 years of being afraid to fly. These are all thick with Irony. Irony is not dead, just often confused for karma.
Irony is a technique, not an art form. The question is like asking if use of the color red is misunderstood as an art form, or if the tempo allegretto is misunderstood as an art form. The correct question would be whether or not people really understand what irony means. In most cases the answer is no (as this question suggestions).
The general public doesn't have as rich an understanding of irony in classical art than it did in ages gone by. Irony used to be one of the most subtle yet widely understood aesthetic effects of a work of art, but that quality seems to be lost on a public who can't afford museum tickets today.
The average person doesn't understand how irony actually works. As a written or spoken device, irony means saying one thing and meaning something completely different. Most people misconstrue this idea or flat out get it wrong. Therefore, a better understanding of irony needs to be created so that people are less confused.
I think that irony is still an art form that people understand. Irony is used in a lot of TV shows for comedic effect an it works very well and is very popular. I think that there are some people who are not that smart that don't get it, but for the most part we're okay.