Well, once you have a nice big LCD TV in your living room and a couple of small ones dotted about the house, you probably won't be replacing them for years, certainly not for every fad that comes along.
Short of exploding TV's, of course sales will plateau without some incentive. The incentive, though, is not 3D or HHHHHD, or some other gimmick any more.
When LCD TV's came out, we started to replace our huge cubical boxes with them because - and this is pretty much the biggest selling point of an LCD - you could hang them flush on the wall and regain 16 or so cubic feet of space for no loss. When HD came out, it didn't really hit home (and I still see people playing SD content on HD TV's and gasping over it without realising) but, along with digital TV and the LCD space-saving incentive, it was the right time to change hardware and almost everyone did. At once. Now. Done. Finished. Even grandmas had to change their telly to keep watching Corrie, so they did, got themselves some room in the corner of their living room, and carried on.
What's to change that for again? Maybe some early adopters missed out on the HD-ness, or the digital-side but they've rebought or compensated for that mistake now. So all you're seeing are natural, base-line sales after everyone's upgraded to the superior product (for many reasons, combining to a SINGLE upgrade for each TV over the last few years).
You can't keep making people upgrade things like that without an incentive and, really, what's the incentive now? 3D? No thanks. A lot of people can't even see it or it affects their vision so you can't just bundle it by default either (poor sods with vision in only one eye probably REFUSE to upgrade to it, even for free, for instance).
I have deliberately put off buying an LCD TV until it settled, for instance, and that point was probably last year. The problem is - my TV still works and in 4:3 is actually giving a bigger image on widescreen content than a lot of widescreens (so it's actually a loss to all of my stored 4:3 content to upgrade to anything that isn't something ridiculous like 40"). I don't need the space but may be moving soon and, yes, probably then I will buy myself a nice LCD TV to get the most out of a having a bigger room with no cabling worries.
But after that? What do they expect me to do? Just keep buying TV's for no benefit? It ain't going to happen. For a few hundred quid, I can get a 36" LCD TV with Ethernet, Twin-SCART, quad-HDMI, VGA, DVI, Composite and even Aerial in, with Freeview tuner, interactive content, DLNA access, internet-browsing, USB ports, smartphone control, less energy consumption than my old CRT, and more knobs and whistles than I can shake a stick at. Precisely what else do they think I *need*, to the point I will throw all that away to buy something else, if I already have that?
The market "dwindling" isn't news. It's just hit peak and now we can get back to normality until some moron decides that 1080p isn't enough and we all need to have 7 million HD channels and not just a few thousand ordinary channels on our digital TV.