I've read through this thread and have actually had this discussion with friends a handful of times before. I'm probably closest in age and perspective to JohnVF, but to say rock music is dead is doing it a disservice.
I think that there are rock bands that can sell out large venues still. I think prior to their break up the White Stripes were the last true, new, rock band I can think of that could sell out Giant Stadium (to use a local barometer of popularity). I think that there are bands out there like the Black Keys, My Morning Jacket and Kings of Leon that are getting really close. If memory serves me, both Black Keys and Kings of Leon within the last 3 or 4 years both sold out Madison Square Garden.
That said, I think what Nirvana managed to do was make arena rock very uncool for a large swath of people who are now in their 30's and early 40's and it's had something of a ripple effect since then. Rock music went from being every kid in your math class having a denim REO Speedwagon jacket, to kids who are interested in rock music finding their own way, and looking to find new bands. The fact that in the 90's it was suddenly uncool to listen to "whatever's on the radio" meant that the radio went looking for whatever was next, and it found hip hop, country, dance music, and then relied on the classic rock format which still lives on. Rock fans were willing to exert a little more effort, which paired up quite nicely with the blossoming internet. So suddenly Nirvana fans who heard that they were inspired by the Raincoats but couldn't track down a Raincoats album in their local record store, could find a Raincoats album rather easily. Without too much of a stretch that led to Napster, an itunes and whatever, which gives you every band ever at your fingertips.
It also made it possible for anyone with a 4 track and some time to release an album. So where you used to have to spend quite a bit to get your music recorded, you could figure out how to slap together an album with a couple friends in your basement or garage, so the sheer number of bands exploded. I think that in the end the variety and accessibility of rock music has made it seem like it's not as popular, but as a genre I think it's just as strong, and for every Lynard Skynard that's not necessarily relevant, there's a Drive By Truckers picking up the slack.
I'm not sure my point is being made very well, but no, I don't think that rock is dead, I think it's just mutated.