Have niche websites become too dependent on Google traffic?

i would say google traffic is important but having a good strategy with many sources can make a niche website more stable.

i think a lot of niche sites are still too dependent on google. seo is great but relying on the traffic source is risky now. building an email list, social traffic or a community can help soften the impact when updates hit.

Google keep changing / updationg algorithm since a long time. We always adapt and learn from the new updates.

You should also build your regular visitors using, notifications, subscriptions, social media and paid ads to keep your traffic flowing even if algorithms hits your site.