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^No. What Japanophiles, including but not limited to anime fans, call the kawaii aesthetic is alive and well today in Japan.
However, the general Japanese public don't always understand what "moe" means -- it's a subculture word -- whereas "kawaii" is positively ubiquitous, as it's a daily use common word. Don't make the mistake of thinking that the otaku culture equals all of Japan.
Naturally, in otaku parlance, moe and kawaii are really rather interchangeable to a point. There are times when you can't replace one word with another, and there are times when you can.
Some example uses:
If you think about cosplaying maids or AKB48, yeah that's kawaii and moe. Don't bother distinguishing semantics there.
You can't say (without irony) that Fist of the North Star is kawaii, but I'm sure someone out there is totally moe for it. Oh, and if you say you're imouto-moe, you like younger sisters you damn pervert.
On the other hand, a typical Japanese (female) teenager on a window shopping trip will say "kawaii~" at a cute handbag or stuffed animal. But unless she is a fujoshi she will most likely have no idea what you're on about with your "moe" stuff ("What are you talking about, what's on fire [moeru]?"). Moreover, calling children "kawaii" comes naturally (they're cute...technically speaking), while saying you're "moe" for children is...um...dependent on context interpretation.
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But as for the rest of the thread that this question is merged into, I'm of the opinion that moe has a use as an import word for a concept that is rather difficult to shoehorn into an existing English word (a.f.k.'s "turn-on" was actually pretty clever and conveys the right meaning for the translated scene, though not for all usages of the word). On the other hand, "kawaii" literally means cute; you'd only use that word legitimately in English if you're trying to draw attention to a certain kind of Japanese cuteness aesthetic.
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