Yeah, there's a few simulators (Il 2, LOMAC) being developed and refreshed by Russian developers, but the genre has gone deep underground. Even Dwarf Fortress is more in the public mind.
I think that has less to do with simulators becoming more obscure and more to do with DF being just completely batshit insane in every respect. Madness tends to attract attention.
It's almost nothing to what we had about a decade ago when you coulbn't turn a rock over without finding a bunch of competing flight/tank/submarine/helicopter/spaceship/etc simulators.
True, but I also remember a time when there was half a dozen new RTSs coming out every month. And before that it was all shitty Doom-clones and nothing else. In my experience, these things come and go in waves.
Also, I have to add, it's interesting that while the Western industry is sinking, there's a number of horribly bugged but exciting games popping up from the former USSR, like the aforementioend simulators or STALKER and co.
There's a number of exciting games popping up from all over the place. Kerbal Space Program, for example. That's Brazilian, IIRC. Magicka, Swedish. Mount&Blade, Turkish. Hell, the Operation Flashpoint/ARMA series. That's Czech.