Shmups aren't the most Alive genre but they're certainly not dead either- we still see maybe a dozen or so of them released every year.
They basically represent a lot of Old Gaming, an age when non-MMO games weren't SaaS. Nearly all of them:
Don't have add-on DLC
Don't need to be connected to a central server to play
Immediately get you into the action, with as short tutorials (if at all) as possible
Are made on a small budget by small, passionate teams
Require no more than four buttons
Don't try to entice you to spend more money with limited-time sexy characters that you have a 1:1,000,000 chance of rolling in the gacha
Of course at the same time, they also often represent why the gaming industry and gamers in general moved away from these games (even if you cut out the capitalistic reasons) and why they will forever be a niche genre, unless you make significant changes to the formula:
They're often "only" 20-40 minutes long
They're quite difficult, making Dark Souls look about as hard as basic math, and players are expected to eventually get good enough to clear the game without continues
They often have excuse-grade plots and lore
They often have scoring systems, which is seen as "archaic" and speedrunning its "successor", and shmups are fixed-pace games that don't lend well to speedrunning
They lack (meta)progression mechanics so players lack extrinsic reasons to replay them
