At least it seems like blogspace isn't growing as rapidly as it used to. Mojoey notes that the atheist blogroll has been hovering around 900 for months; similarly Outer Blogness has had a population of around 200 for a while.
Here's TooManyTribbles' video of where the atheist blogroll was at two years ago:
It looks like blogging is still quite popular, and still growing in popularity -- just growing at a slower rate. My guess is that the people who thought blogging would make them rich-n-famous have given up, the people who were just in blogspace to share photos with family and friends have switched to FaceBook, and people who like to try the latest fad... well, I'm not in the loop as to what those guys are up to. The people who remain here in blogworld are the ones who just happen to like expressing themselves in this format.
I like socializing online (see my friend, the Internet), and I especially like having the motivation to write out my thoughts in coherent essays. It's fun to share ideas and discuss! :D