the problems that bitcoin had last year (block size drama, fork drama, high fee drama and spam attack) has opened up room for altcoins to attract a lot of investors but now that the problems have been fixed and the drama has almost gone away that room is being taken away and altcoins are losing all the attractiveness that they had. specially since people used them and got disappointed when they encountered their issues.
I don't really think that altcoins have gained any sort of significance because of Bitcoin's 'incompetence'. I think the main thing that made altcoins grow larger and larger is the fact that Bitcoin has become too expensive to buy (people are too stupid to realize they can just buy a fraction), and the fact that if they position themselves in altcoins, their investments will grow at a much faster rate than when they would have invested in Bitcoin.
Bitcoin is almost guaranteed to increase in the long term, and altcoins, as worthless as most of them are, will increase alongside Bitcoin, but again, at a much faster rate.
Ethereum goes through the exact same drama Bitcoin has been going through; scaling debates, congested network, high fees, front running transactions, etc. People still use it and it hasn't lost any significance yet. Maybe that will change when EOS finally starts lifting its ass up, but for now they are still the best of the rest.