This strikes me as a lot like the so called war on Christmas. I am seeing lots of SF all over the place -- particularly in media. Lots of block-buster movies are based on fairly solid hard SF ideas, for example. Granted many of them suck as movies, but the hard SF content is still there. e.g., The Island dealt with a fairly straightforward hard SF idea (if an unoriginal one). JMS does Hard SF in comic book form. Point to a medium and I can find an example of SF based on science in it.
Similarly, you can still find plenty of hard SF getting written on the web if you know where to look. Cory Doctorow, who will be GOH at Boskone, distributes his stuff online as E-Books.
What we are seeing is an economic phenomenom (Mabfan was right on that score) in which publishers tend to treat books as a mass medium (and therefore focus on what they perceive as the most likely to sell content (proven best sellers) or really cheap content (newbie authors held to multi-book deals)), re-enforced by changes in distribution mechanism (the growth of chain stores over traditional book stores). We are also seeing some shift in taste. Many of the interesting issues hard SF addressed have now arrived. Good SF has moved on to other issues and relies increasingly not just on ideas, but on character.
Consider Bujold, one of my favorite SF authors at the moment. Is her stuff "hard" SF? Well, it is undeniably SF. Ditto David Webber's Honor Harrington stuff (or perhaps, even more so). Once we get past the hand waving for FTL travel (a standard dodge), neither author has anything that violates the rules of SF. But for some reason, defenders of hard SF chose to relegate these authors to "space opera" rather than hard SF.
What people seem to be lamenting about is (a) fantasy is real popular at the moment, so much so that many people new to SF fandom are more likely to know the Harry Potter corpus and not recognize any of Hal Clement's stuff; and (b) books of the kind they like (or write) no longer get published or find space in book stores. Most of these are of the "take a scientific idea and see where it goes" variety.
What is interesting to me is that many writers now in the hard SF cannon, such as Heinlien, wanted to get away from the focus on science instilled by Hugo Gearnsback and focus more on fiction. I believe it was John Campbell, for example, who said his philosophy was to have writers write adventure stories set in the future, rather than have them explain all the nifty gadgets. Yes, they wanted the science to be as right as they could make it. But they didn't set out to write "hard" SF as much as they set out to tell nifty stories set in the future.
I can think of no better example of this than Heinlien, held up by Benford in his essay time and again as an example of a science fiction writer now out of favor. Actually, when I go to a Borders or B&N I can usually find a few Heinliens still in print, because the man could write and did some amazing stories that remain relevant to this day. People still buy Heinlien and read Heinlien not because he was "hard" SF, but because his characters are memorable and his stories well written. (He is also one of the few writers of the period who had non-white characters as central characters, although he did it with wonderful subtlety. this is not a matter of political correctness, but simple economics. People like to buy books about themselves. If you are black (Star Beast) or a woman (Friday), Philipino (Star Ship Troopers) or Hispanic (Moon Is a Harsh Mistress) you can find a Heinlien book with someone like you in a prominent role. That's a lot harder to do with some other authors now in eclipse.)
Yet this meme that there is a war on hard SF and we are doomed to slip back to the dark ages seems to be circulating in the air right now. But I see not so much a war, as a transition. Things are changing radically to be sure. Everything from the methods and economics of production and distribution to the very nature of the buying audience is in flux. But good SF, as long as it tells good stories, continues to thrive.