The transition from "Smalltalk as an OS", with the problems pointed to by @Jack Rusher and @wtaysom, to "Smalltalk as a subsystem running inside an OS" (Squeak, Pharo, several commercial implementations) has made a big difference. Perhaps today, Smalltalk's biggest problem is smallness. The developer communities behind the currently most visible implementations (Pharo, Squeak, Cuis) are ridiculously small compared to other languages and IDEs. The systems themselves are not very visible, and "everyone" knows very very well that "Smalltalk is dead".
On the other hand, what these small communities achieve is impressive. My current main work environment, Glamorous Toolkit, is developed by a consulting company of eleven people as a side project. They have built a complete new graphical stack, all in Smalltalk, building on Skia as a base layer. They have also built an innovative UI framework (again, all in Smalltalk) on top of that. All that is still beta quality, but it's usable, not a mere prototype.