I loved Reader for a while, but have since moved away from it in favor of twitter: Reader is like a dam that keeps backing up... every time you log in you see this unread count and the implication is that you need to "catch up" and skim everything. On the other hand, twitter is a flowing river and if I miss a day, it's gone without guilt. Reader is still great for those sources you just never want to miss though.
RSS isn't "dying", though RSS readers are probably "languishing".