FF is not a niche, it is not ever shrinking by any means.
Rather than debate the meaning of "niche", let us just look at some facts about market share.
In film 35mm format had almost 100% of the SLR market, losing share mostly to larger rather than smaller formats.
When Canon and Kodak "FF" arrived about four years ago, the 1Ds has about 5% market share (24,000 annually when total DSLR sales were about half a million).
The Kodak 14/n seemingly had higher unit sales due to its far lower price, wit one estimate being 80,000/yr. So more than 5% market share for the 14/n, and maybe as much as 15%, giving FF a total of more than 10% and maybe as much as 20%.
Today, the 1DsMkII apparently has the same stated production level of 24,000/yr, but with total DSLR sales volume now about 4 miilion/year, the single model "professional 35mm format DSLR" sector is down to about 0.6% share of the total DSLR market. Also, Canon has reportedly stated a production level of 100,000/year for the 5D which would put it at 2.5% share, distinctly less than the 1Ds or 14/n. That gives a current FF total of about 3%, far less than the 10-20% estimate for four years ago.
Clearly market share for 35mm format SLR's is shrinking, with a trend from almost 100% to 10-20% to 3%.
Restricting to the professional sector, the D2X is clearly far more competitive with the 1DsMkII than the D1X was with the 1Ds, so professional SLR market share for 35mm format has surely declined with the arrival of the D2X. Indeed, the 1DMkII also improved resolution over the original 1D to the point where many professionals choose it rather than the slower, more expensive 1DsMkII or the slower, less rugged 5D as a general purpose SLR, and the 1DMkII is a "1.3x crop camera", not "full frame", not 35mm.
Decide for yourself how low the market share must be before the word "niche" applies: for me, 3% does it, and is probably comparable to the SLR market share that medium format film cameras had a decade ago.