C is definitely not dead in general. Some problem domains, it is true you will not find much C. Think web applications or maintenance scripts.
I will still write my web-app in PHP or perl and not C. That is not because C sux and i as l33t, but because I want to get my job done fast, runtime is not a issue its under a sec. On the other hand the language recognition (compiler), I will write it in C++ (sort of C), because in Java it would suck ass. People do not want to wait long for their task to complete and there is a difference between 10 min or 3.
I must say though, that there is a shift from C to C++ as THE low level language. But still most VMs are written in C.