2D animation is still definitely alive in Japanese anime! Studio Ghibli still create 2D films, and it is definitely alive within TV and online advertising, animated info graphics and 2D games! The area where it is no longer used is in Disney films and Western animated films in general, but it is still alive within so many other areas.
I recently attended a couple of screenings of the British Animation Awards, public vote at the Regent Street Cinema, London and there was a great variety of animations screened including lots of 2D, along with stop motion, mixed media and 3D. I enjoyed The Evening Her Mind Jumped Out Of Her Head by Shaun Clark and Kim Noce, Weather the Storm by Benjamin Sheuer and Stromae: Carmen by Sylvain Chomet, to name a few.
Stromae: Carmen by Sylvain Chomet