Travel agents have certainly lost all the cheap holidays and packages but the companies that have survived have plenty of business. I have two friends in the trade, one belongs to a small local business in a wealthy town and the other belongs to an international chain.
Firstly, there is the top end of the market where people are ready to pay for someone to fix it all and, crucially, carry the can if any of the arrangements are wrong! If you book youself, then you have no one else to blame ...
Secondly, there are business' who get big discounts for having all their travel routed (pun intended) through an agent. They often want complicated itineraries that are a series of point to points which, if you book yourself will be seen as separate single flights by the carriers. The agent can link them, sometimes with different carriers not in an alliance and get a lower price with (often) a single ticket.
One friend said last week, that they had to get a group of ten people on a promotional tour that had to follow a certain sequence (as the venues were already booked) and had to have all the group travel together, even if some were in C and some in Y. They also needed hotels and connection taxis etc. With her dedicated system and experience, that took nearly a full day's work.
Lastly, they do often have lower prices as the big companies may have block booked and have regular arrangements with the carriers. As Hartington says, they can be worth more than their fee.