Back onto music games...
Like I said, as time passes the cost of design decreases, which helps to negate declining numbers. While DJ Hero isn't a shining example because it represents a new cost of entry into the genre, the actual music games will have an easier time making money as time passes. A major reason why the Rock Band sector hadn't made money was acquiring the Beatles license to actually create the Beatles Rock Band, wasn't it?
I still believe that if you give it time, there's room for a music game genre. If there's not room for two different series in the game, then we'll see a compromise solution where both developing groups publish to the same platform, but neither are going to back out completely.
As far as DDR goes, in the arcades, it has major competition, but at home, the competition was never stiff. Other Bemani and a game, something like "Step it up" or "Beatmania," I can't recall, using a different button panel in the shape of an "x" is actually easier to find than DDR is now, at least in a lot of places. It's not like it didn't go through competition, and like it's been said, despite it's age, DDR churns out several sequels every year, with much less appeal than Guitar Hero and Rock Band. Don't forget Rock Band has yet to begin accepting songs from garage bands and the like. There's definitely a process to bring the franchise to the black underway.