No, not dead... just have to be sure to target them to your demographic in order for them to be useful.
What do you get? Just a big white rectangle on the page? I don't see any point in blocking them. All you have to do is simply ignore them.
Some ads i hate, they animate and blink and are annoying!! Some even claim to not load the, meaning saving page loading time!
I use adsubtract, it actually just removes the section from the area it use to be. Makes googles adwords, yahoos email ads, and everything else that is annoying disappear.