Discussions concerning photography's demise as an art form are always problematic and provocative. If we consider how digital technologies have influenced photography in the past two decades, we need to place the debate within a larger context. Consider how painters must have felt in the mid to late 19th century when photography emerged as a viable alternative to capturing realistic representations. At that time, photography was the "new technology", which surely stirred up lots of emotion.
For centuries, painting was far from experimental. Artists were concerned, in large part, with realism -- the ability to make objects in the world appear real on a two-dimensional surface. Many portrait artists lived off the making visual likenesses of their patrons with paint on canvas. Photography's influence on painting cannot be overstated. With the invention of photography, painters were released from the constraints of realism. For example, the early impressionists of the 1860s, artists such as Claude Monet, Vincent Van Gogh and others, were inspired by candid photography. The impressionists were able to take chances with form and style. Photography's realism filled a niche -- it was faster, less expensive, and more accessible than painting. Further, you didn't need to have extensive training in drawing and painting to produce a representation of the world around you.
Photography is not dead, it's just changing. Just the same it changed in the 19th century for traditional artists.
Today, the commonly held perception that a photograph provides a reasonable likeness to what is seen in the "real" world is changing. Digital technology, with its capacity to reconfigure reality, is viewed as a threat to the status photography once enjoyed as a form of conveyance -- one burdened by the responsibility of being perceptually accurate. We now have cameras that can make people look thinner, remove blemishes, correct color and tone, and sharpen the clarity of the pictures produced. Visual veracity is now in the mind of the beholder. Pictures, however, may still be worth a thousand words, but what makes the medium difference today is that the technology is increasingly able to determine what those words may mean.