Hell no, emulation isn't dead...sure, older consoles don't NEED any more emulators to be made; the current ones run every game there is. But newer systems (PS2, Xbox, GC, even n64) still recquire new emulators to get everything working. For every new console there will be new emulators for many, many years. (If you dont believe me, just look at SNES; new emulators were still coming out for it a year ago, even though the system is many years old)
GC and PS2 emulation will keep programmers busy for years...Xbox emulation, however, is allready mastered (; "CXBX" is the only Xbox emulator that I know of, and it runs every ROM that I can find perfectly. Anyway, no, emulation is not dead, and as long as there are new systems to toy with, it won't be.