It dominated the scene for quite a while. Looking at the Xyzzy award winners will confirm that. Even the first Best Game winner ("So Far" by Andrew Plotkin) was an Inform 6 game.

However over the past decade or so the scene diversified a lot more, particularly as choice-driven rather than parser-driven games became a lot more popular. Twine is a tool for making browser IF games that really broke through there, although in recent times Ink has gained popularity both for making IF and as a tool for making dialogue systems in other non-IF games. Most new parser-IF games I encounter though still tend to be Inform.

A small tangent: for readers interested in IF and curious about trying to write one, Inkjam is 3-day event where you make a short game with Ink, and this year's event is in early September. I participated last year and it's good fun and a good challenge!