I think the genre is dead because they kept trying to make the games TOUGHER and MORE HARDCORE for a single group of their players that was pro and wanted to be continually challenged with newer, tougher shmups. I like shmups a fucklot and have bought and played pretty much every one from the PS2 days on (Dodonpachi was my first "modern" shmup after growing up on Raiden II at the arcades with the awesome purple laser), and I'm not even that bad at them. I'm no hardcore pro, but I can get through few stages in on a single life and enjoy the heck out of it.
But as each Cave shmup came out, they kept feeling tougher and tougher and just stopped being fun and more frustrating. Hell I have a hard time even seeing WTF IS GOING ON in SaiDouJou. I went back and popped Espgaluda 2 back in and it was like night & day how simple the visuals were and easy to keep track of the bullets and your little 1 pixel hitbox. But the latest games are just visual chaos and ridiculous patterns everywhere and in return you get bullet cancelling or invincibility or some gimmick to counter it. I dunno, I don't find that fun. Ketsui is challenging (so is Espgaluda I/II), but they're easy to visually track and don't have too horrible bullet spam for a few stages because there's no gimmick and it's just about dodging (in Esp, slow dodging).
I feel like the first Death Smiles was a good attempt to bring their games back to accessible levels for the non-5%ers of pro-leaderboard level shmup players. It still had good challenge to try to 1CC, and the selectable difficulty levels per stage were great. The ability to make your own stage order kept it fresh on replays, and it actually worked in a half-decent plot in a non-intrusive way. And guess what? It also sold really well (for a Cave shmup on consoles at least). So what do they do? Try to make more accessible shmups? NOPE, BACK TO HARDCORE MODE (and make a budget half-assed ugly 3d Deathsmiles on the side).
;_;
And yeah, I don't think price has much to do with it. The audience is limited at around 20-30k players. 95% of them will pay $80 or $15 and don't care which amount the price is. Same with system choices. Shmup players go where the system that has shmups is. I seriously think it's about accessibility. Though at the same time, the more accessible the game is, the more it should be on the platform(s) where the most people are to capitalize on that. Death Smiles would have done pretty well on PS3 I think.