I have mixed feelings about this. For starters, OP, I don't think you should reduce fans' preference for turn-based combat as purely nostalgia-based or whatever. You're not really in a position to judge their motives, dismissing their preferences as this or that is only going to put them on the defensive, and why they like those kinds of games isn't really relevant anyway.
On the other hand, I agree with a lot of your criticisms of the genre. I don't like most modern turn-based games. Partly this is down to my own, totally idiosyncratic dislike for games with realistic graphics that use the traditional turn-based combat trappings (i.e. party stands in a row, numbers float above heads, attacks don't actually connect, etc. etc.). It's just jarring to see, something so realistically modeled and lovingly rendered behave in such a stiff and unrealistic way. Oddly enough, I don't have a problem with sprite-based characters acting this way. I think it's because I see sprites as symbolic rather than representative, so it's okay that their attacks are also symbolic, whereas I expect realistic character odels to engage in realistic-looking combat. That or I'm just used to the one and not the other. *shrug*
That said, I think cheering for the death of turn-based combat is throwing the baby out with the bathwater. I'd like to see turn-based combat to evolve as much as game visuals have in the past two decades, rather than just die off. I'd love to see a developer try a game without (visible) numbers in combat: no health bars, no attack/defense stat, and any blow can be fatal. To make this work, you'd have to create a visual language to give players indicators of when characters and enemies are safe versus when they are open to attack and how much more abuse their equipment can take. You'd also need a combat system that relies heavily on context, though it could still be accomplished with a drop-down menu. Basically, take a fencing match that's over in 30 seconds and break it down into every individual choice that players make. This would give you a weird visual dynamic where attacks take place at normal speed, then time freezes until the player makes the next choice. Films often use this mix of fast and slow for action sequences though, so I don't think it would be too jarring or hard to understand. The goal of battles would then become working enemies into a position or situation where they will be open to one fatal blow rather than whittling down a health bar. It would get complicated enough in 1v1 battles, but push that out into a 3v3 conflict with characters that can move in any direction and serve different combat functions (ranged attacks, magic, armored, etc.), and you've got the makings of a very complex but, I think, manageable turn-based battle system where the victory relies much more heavily on moment-to-moment strategy than stats.
I guess I'm asking some studio to take a chance on a dynamically turn-based, 3D, party-oriented, Hotline Miami... or maybe just multicharacter, 3rd-person, Superhot plus drop-down menus. Lol.
I dunno. Maybe that approach would be so radically different that fans of traditional turn-based combat wouldn't care for it anymore, but there has to be some kind of middle ground that can please old fans while also bringing in new blood. I think that formula would make for a really turn-based RPG though, something in which the combat would match the visual fidelity of modern games in depth and complexity. It would take a fairly large studio though, and we all know how interested in taking risks the AAA publishers are.