I think bicycles still have a place, in some neighborhoods. However when you raise your kids in a city, sometimes its too dangerous to ride bikes. When i was a kid, my bicycle was my freedom, i mowed lawns for older family members (great grandmother, great aunt, etc) and my bike was how i got TO their houses. When i was 14/15 my friend and I rode our bikes EVERYWHERE including a town that was 15 miles away just to go to a pet shop! this was all on mountain bikes, its all we had. Even once i got my drivers license, i never had a car so my bike was my main source of transportation to tennis practice...i rode the bus in the morning because i wasnt ever awake enough to walk, and walked home from school, rain, snow, shine, cold hot etc, then would ride my bike back to school for tennis
im 25 (a kid to some of you) and while i need to ride more, i definitely have a few bikes (5 at the moment). My road bike which i love, my mountain bike which i have put countless hours into building up from frame and components, a bmx i dont ride, another mountain bike that needs the frame welded/replaced, and my recent addition an older steel schwinn mountain bike that im repainting and fixing up for a commuter/errand bike.
I think the importance of bicycles to kids these days relies ALL on the parents. My girlfriend hadnt had a bike in years till I bought her one this summer. I got her a nice Trek because I knew she would use it, and she just deserves a good bike

shes only 18, but you should see the smile when shes biking! If I ever have kids, they wont be driven around (unless its necessary) and they will have bicycles and tennis raquets...no video games! none. I never had any growing up till i bought my own, didnt hurt me any