Erm, I think that saying that 2D has been pushed to death because you can scroll a window perfectly in word is basically the same as saying that 3D has been pushed to death because Elite is as smooth as it gets on a P4 2Ghz. Word or Excel is hardly what you can call a "killing app" for 2D stuff.
I fairly recently got Cotton Boomerang for my Saturn. This game 6 years old, it's completely in 2D. This game is 6 years old, and when I got I was completely blown away by its graphics. It's just AMAZING. And I can't help thinking that a lot more could been done in 2D.
Take a look at the Guilty Gear series. That game isn't even close to push the 2D to its limits (Tha animation isn't really that smooth), yet it looks better than any 2D game ever made.
2D can still pack a good punch, it's just that developers just don't bother anymore.
Ah, Online game sucks. Playing with friends live it's a hell lot more fun
And I played SWOS EVERY SINGLE DAY for about 3 years. And if my amiga hadn't died, it would be probably a longer time. And I am not exaggerating, I used to play this game EVERY SINGLE DAY.