Honestly, no. Whenever there's an edition change, you lose a significant portion of your player base. In theory, you gain that number and more back. I think those who didn't want to move to 4E but would have in time have been given another option and are pretty happy with it.
Yes, I think it's a permanent niche. This size of it, I'm not yet sure of. Heck, 1st and 2nd still have a niche (Hackmaster, Castles and Crusades [or whatever their names are, I'm too lazy to double check that]).
Heard of, yes. Played, no.