Seems to me it's more an issue of redefining the low-end tier as just about anything that isn't AAA now. It's just "indie" or it's AAA. There are still plenty of games that are being made with the breadth and depth of anything that's been previously defined as "mid-tier".
The issue is what's disappearing though no?
I went over this earlier, but the ceiling on indie games is clearly rising. We're probably still capping out in the single million digit range though.
Off the top of my head, here is an example of the tier of gaming that tanked at retail that we don't see a lot of anymore:
-Binary Domain
-Vanquish
-Beyond Good & Evil
-Darksiders
-Red Faction
-Most middle-budget console JRPGs (think Lost Odyssey, Star Ocean, Resonance of Fate, Valkyria Chronicles, White Knight Chronicles, Valkyrie Profile)
-Prince of Persia
-Kane & Lynch
Not all of these cost all the way up to $15 million. That's probably a bit high bar for me to set.
We sometimes get something like one or two big games in the genre, or a mid-tier company that's succeeding by having a successful niche, but the amount has tanked.
Now, of course, not many of these were very popular, so not a lot of people are going to mourn their passing, but it's not unusual for someone to have liked some of them.
What these games all have in common is that around the time of their death they weren't at the top of the pile in terms of success, but they also weren't on the bottom of the pile budgetarily, so they got cut in favor of bigger franchises or putting resources elsewhere in general.
I mean yes, of course mid-tier is being redefined. That's because AAA is also being redefined and indie gaming is as well. If we wheel back to 2007 a $40 million budget would sound gigantic, you could count the major indie games on two hands, and $10-$15 million licensed games and original IPs in popular genres were quite common. That's not the situation in 2014 where a $40 million budget is bog standard for a AAA release, indie games are extremely plentiful, and the gap in between hardly gets as many releases as it used to.