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IMO, there are two answers to the OP.
Baen the publisher (pbooks and ebooks) and Baen's bar. I don't see evidence either way on growing success or failure of the publisher. However, I certainly hear more about them these days on the internet, and I suspect (and hope) that they continue to thrive.
However, their bar is not what it once was. Their software has always been slow and clunky. Their forum was popular, however, for two reasons. First, it was one of the few places to chat about these topics. Secondly, you could visit the bar and rub shoulders with your favorite authors.
I don't really think their software has become worse, it just has become comparatively worse. I don't know where it is hosted today, but for the longest time, Arnold kept the server in his home instead of moving to a professional, high-speed hosting center. Either Arnold or Baen were very concerned with legacy support: NNTP + Email + Web. It became more and more painful to use the bar when there were increasing forums available with high speed connections.
Meanwhile, life happened with the Baen authors. Weber was double-blessed with adoptions and child birth. Lackey had a falling out. Bujold switched her writing to another publisher (until her recent book). Ringo was burnt out on arguing with contentious fans. Flint became overloaded with both his writing and his illness.
Bottom line is that some of the energy drained from the Bar for me. There are still folks there -- they see Baen as more like family. But it doesn't seem like the same level of participation as in the past.
But back to the original question. I believe that Baen is alive and well. In fact, thriving. It appears to me, however, that the bar is not quite as energetic as it used to be.
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