People like technology and much of the time consider games that don't use the latest engine as old news ("people" in this case are the demographic developers aim for). Its a bit of a financial risk to invest in games that aren't 3D (kind of like its a risk to invest in movies that aren't 3D), so most games are made in 3D. There's also the fact that a lot of older games would've been made in 3D if the technology were available, as 3D allows for the use of depth and height.
However, 2D games are still made, and actually they're more common now than they were a few years ago. DS games tend to be 2D, as well as WiiWare and XboxLive Arcade games.
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