I'd say it's a changing art form, not a dying one. There's still a place for pottery, carpentry, and stonemasonry, but it's a much smaller place than it once was; the same will probably be true of live theater.
I would say no. In fact, I would say it (at the very least) has the potential to be a growing art form.
I stand on both sides of the stage. I am an actor and a lighting designer. The technology makes me all giddy as an LD. The stuff I can do now to make the visual experience that much more involved...
Scientists have slowed the speed of light to a stop. Imagine when that technology becomes available. Now imagine all the people who will come to see Joseph's dreamcoat made entirely of suspended light! Ok... crappy show as an example, but you get the idea. Understand that electronic entertainment media covers ALL forms of entertainment and can be used to effectively enhance live performance as well.
And frankly, I see more people going to the theatre lately to get AWAY from all the techno interference.