Well my thought is that if Nintendo really wanted to continue the series, they probably would have absorbed AlphaDream or bailed them out. Additionally we haven't had a new one in 5 years, and the last entry was a mashup with Paper Mario, so it kind of seems like series is at a dead end. Who is going to champion the series at Nintendo at this point?
I'm more inclined to think they would just revive the Super Mario RPG branding if they wanted to get back into making Mario RPGs. Who knows if that's the case now though, I wonder if they see their RPG portfolio as being fully served by Monolith.
There were two remakes, one came out last year. Not all-new series entries, but not a five-year absence like this post implies (and the Nintendo producer in an interview for the BIS remake certainly didn't act like they wanted nothing more to do with the series, at least at that juncture.) Frankly, there's a lack of curiosity about what happened to the developers from many enthusiasts, combined with a callous and presumptive celebration that the lack of a M&L series would somehow change the direction of Paper Mario games. To some, Nintendo's cruelty turned them out into the cold; to others, they possibly found work at other Nintendo/Nintendo-affiliated studios, neither position has a lot of research to go on.
And again, the M&L developers were many of the same creative forces from SMRPG, if Nintendo wanted a game with
just the Mario RPG branding, they would have insisted upon it, as opposed to Mario
& Luigi RPG, as the games are known in Japan.