Quite a few blogs are, but storage space for FLAC files will continue to be an issue. Also, until Apple makes FLAC compatible with iPods, I don't see it taking off in a major consumer fashion. The majority of the general public doesn't care about quality, they want quantity and affordability.
It is easy to convert flac/wav files to mp3 for the ipod. If you don't want better sound, dump the flacs after conversion.