I think disco and dance music are still pretty much around. I think a lot of modern dance music is essentially the same stuff just with a modern sheen. Well, disco sounds and samples re-emerge periodically in dance and pop music. In the late 90's you had stuff like The Bomb by the Bucketheads, Music Sounds Better With You by Stardust, Turn Around by Phats and Small, Stand Up by Love Tribe and a whole slew of disco-sampling house records... usually taking the sample, cutting it up, adding filters and flangers... it got the name "disco house" or "French House" (because Daft Punk was the best known artist).
Then more recently you had nu-disco, which instead of the 70's disco went more to the 80's post-disco/proto-house/italodisco sound for inspiration... along with lots of re-edits (the "Imagination - Music and Lights" song I posted was re-edited by Tiger and Woods and became a massive nu-disco track in 2010). Nowadays, nu-disco has slowed down a tad and currently the biggest things in dance music are 90's British house/garage revival sounds, or the grandiose progressive sound of the Innervisions label.
Disco House examples:
VIDEO VIDEO VIDEO VIDEO VIDEO VIDEO Nu-disco:
VIDEO (compare this to the Imagination track I posted above)
VIDEO VIDEO VIDEO VIDEO