Their competitors have not "died out". They were either bought out (Ensoniq) or muscled out (Aureal) by Creative.
On-board codecs aren't as bad as they were a couple years ago. In addition, Creative hasn't really added many new features to their cards in that time. People are starting to figure this out, which is why Creative has put feelers into the onboard sound market.
I hope nVidia or someone else makes a standalone card that supports realtime AC3 encoding of the card's output. My guess is that it only appeared on the short-lived SoundStorm-equipped line of nForce2 motherboards because it's probably expensive to license the technology from Dolby. This would also explain why Creative has opted for a proprietary triple-SPDIF solution for 5.1 digital speakers (with the added side-effect that it helps sell Creative-brand speakers).
Edit: Busy at work, so it will take a while to read that article. So far I'd like to mention that developers are actually spending LESS time on sound than they did 5 years ago. They're now using generic SDKs like MSS and FMOD to do generic 3D sound positioning, while ignoring reverb and other advanced effects completely. The other part of the problem is that many people only have 2.0 or 2.1 speaker systems attached to their PCs and don't really care about cool 3D sound effects in games, which discourages developers from spending time and money on that aspect of their games.
Edit 2: Interesting. It does seem that EAX is an extension to DS3D.
The article should have mentioned that A3D is dead (I guess it was still dying a couple years ago when the article was written). There is no support for it on any modern sound hardware unless you install some ancient software rendering A3D drivers that are floating around.
I've thought of looking into OpenAL as an alternative to DS3D, but this article mentions that developing for it is "a nightmare". The upshot is that it is cross-platform and is supported in hardware by some nVidia on-board sound implementations.