Bloglines has been a crappy product and user experience for years, and I honestly don't think that Google Reader is that much better (anymore -- used to be awesome).
I much disagree with the assertion that RSS is dead, or even that RSS aggregators are dead/dying; I just think that Bloglines (and others) have really crappy implementations of what a news reader ought to do. Frankly, I always though that treating RSS feeds as email was the wrong way to go.
What do you think used to be better about Google Reader? If anything it was much more like email before!
You have to host it yourself, but after using it for five minutes it proved to me that it is was more than worth the $30.
Particularly interesting is its concept of Sparks (a.k.a. RSS feeds with a high volume of posts that you wouldn't subscribe to normally.) Fever uses them to help "feed the fire" and surface the most relevant/interesting content from the publications you do subscribe to.
Also works very well on the iphone. These are just first impressions but so far I'm pretty impressed.