I wouldn't be so quick to lay blame at the rise of video games' door. Like comic books, RPG's have had a huge advertising problem in the last few decades. They're not advertised or easily available for purchase, usually only available in specialty stores, or big chain bookstores. Since Borders (US bookstore) went under last year, the only bookstore we have in my town is Barnes & Nobel and I'd say about 80% of their stock is D&D stuff, however if you're new to the experience and have questions, it's unlikely anybody working in the store will be able to answer them beyond where they are located and how much they cost. If you're lucky and live in a big city, there may be game stores that sell both board games and books, both used and new, and the staff will be able to answer your questions. I've definitely found that game store personnel shake the stereotypes associated with comic stores and are a warm and friendly environment.
I definitely will concede that video games have had an impact on PnP RPG's, but I'd say it's more because of the prevalence of video game usage. As many people in this thread have said, they would play an RPG if they could find people to play with them, whereas with video games you can find plenty of people on multiplayer games, you just need to start it up and find a populated server. No looking for players, no finding an agreeable time and then hoping nothing comes up, just double click on your icon and log in. Now obviously there are other obstacles like server's being down for maintenance or nobody being on, or internet connection dropping you, etc. Apparently D&D 4th Edition did try to make their combat more akin to something you'd expect in a video game, with large groups, and has received a lot of criticism, enough to cause Wizards of the Coast to announce a new edition and to include fan suggestions and test plays before the finished product is released, which makes me curious as to how many people switched over to Pathfinder.
Finally... while mainstream culture has had a more changeable relationship with nerd culture over the last decade, I've never felt that PnP RPG's had really been embraced. Video games, comic book characters, sci-fi/fantasy/horror, etc. have all in some way flourished over the last decade with more "mainstream" audiences, but I think you'd be hard pressed to find people on the fence in their geekdom to play a game of D&D. It's kind of sad in a way that a large group of man-children playing Call of Duty together on a server all in separate locations is considered a fairly normal way to spend an evening, but a group of like-minded individuals meeting up around a table and creating a story together is still considered as something for losers.
You should check out the non-fiction book Fantasy Freaks & Gaming Geeks by Ethan Gilsdorf for some more commentary on table top gaming. I'd recommend picking it up used or finding it at the library as it's not the type of book you'd read more then once.
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