I agree with what was said. In the more competitive or shall I say profitable keywords those "specialty sites" using keyword domains are now sitting on the bottom of the ocean as it were.
I think the key phrase here is "staying power". The staying power of a niche keyword domain site is dead in my opinion. From a Google perspective of course.
In a sense it's like this. Not a lot of competition, you exist fairly well. As searches in Google increases, they then go looking for Wikipedia or should I say quality authoritive giant sites.
Sure there is a marketing aspect to a keyword domain. Then again maybe in Google's mind they don't trust those domains as much anymore. Makes sense to me. Could be one of the many flags. Thin site and keyword domain? Affiliate links? You get the picture.
I'm just offering caution to anyone shopping for domains. In my opinion Google didn't just lower the value, in fact I feel they killed it entirely. Shame really because when you have a keyword domain, you as a searcher can be assured that the website is all about that keyword phrase. Not good enough for Google it appears.