Games as a whole evolve, just like everything else. And like everything else, it can go very slowly or painfully fast. Genres stagnating are genres dying. I would argue that not only MMO's, but also FPS's and RPG's are in a rut, because they keep holding on to formulas that have been succesful in the past, but aren't as appealing to the new (and broader) gaming audience. I'm not advocating cutting out the stats and abilities system in RPG's, for example, but it needs to change, it needs to make sense in the modern era of gaming. If there is indeed one genre that needs an overhaul, then yes, it's the MMO. When I read how much is at stake with these kind of games, I wouldn't hold my breath, though.
But let's not take these bumps in the ride as an indication of the state of games as a whole. If we take a look at the Singleplayer RPG, it's not all as bad as it seems. Just look at The Witcher 2. Already being talked about as one of the best SPRPG's in recent history (and I still haven't played it, forgive me for this deadliest of sins). We've had a stealth FPS/RPG hybrid in Human Revolution and we had the fun, beautiful Indie RPG Bastion. Skyrim, Mass Effect 3, there's something for everyone in the genre. And with Wasteland 2 coming, there's something the nostalgic, diehard RPG fans can be excited for.
I can't remember how much quality RPG's were released around the timeframe of the first KotOR, but was it really that much better a time for RPG's than what we've got now? I'm not sure. By the way, make no illusions: game series like KotOR and Mass Effect are far and few between. It's like having seen the Star Wars trilogy and wondering if there's ever going to be something that'll match it. You'll look for it, but you might have a hard time finding it.
Lastly, there are times when I'm a bit sick of games, as well. At one point, I only played one or two games in a year. But there's still so much to discover, I think you'll find that there will always be something that'll draw you back in. Games rule, yo!