It's absolutely alive if you use it correctly, as is the case for so many online marketing tools. If you just throw an article at the spinner and post up what it churns out, then you're going to get a pretty crummy article in return. However if you take a short while longer and put in the work to ensure that it actually reads like something someone might have written, it can absolutely work for you.
You just can't expect the spinner to do all of the work for you. It's like SEO. Some people think that just using SEO is going to put them right up at the top of Google rankings, as though there aren't thousands of people out there using it. But if you use it intelligently it's a highly useful tool, and will continue to be. The same goes for spinning.