Integration is the keyI think the whole issue comes down to what we mean by 'LMS'. Based on my work with organisations in the UK, integrated systems offering :

Training Administration
Alerts (eg when refresher training is due)
Access to e-learning
Personal Development Planning

such as the Consensus LMS : www.consensus.co.uk - can genuinely add value to an organisation. Old-style LMS offerings which simply organised e-learning activities, with little or no relationship to othera spects of learning and development, are indeed facing tough times.