For the majority of those under 30 years of age, the electric guitar is dead. The story of falling guitar sales is an established fact. For myself, as a guitarist for 35 years, I have to admit that the electric guitar looks like an anachronism. I know that when I play electric guitar, I am living in 1973. Not such a bad thing. The late 60s and early 70s defined the electric guitar superhero with all flowing locks and flared trousers. There is inherently nothing wrong with this, but this guitar hero won't be reborn soon.
As technology and fashion change, it is just the case that every genre has its time: the baroque quartet, the big band, the super group—they all have their time. In this century, these genres have their niche and their ardent followers, but they aren't the next big thing, more like the last big thing.
I was struck by someone in their teens playing in my local guitar shop. A fine repertoire of famous guitar riffs is played well, but nothing from the 21st century.
The electric guitar as an instrument isn't extinct; it still has plenty left to give, but the days of the superstar guitarist that the youth want to emulate today are over. The electric guitar still has a functional role in many musics. There is plenty of funky guitar around and some great rocking. It's just that the electric guitar no longer holds the spotlight that it used to.