I feel your pain Rooster. I'm sure a lot of the people who say they don't like jazz aren't thinking of Kenny G, they're thinking of having sat through a lame performance that was billed as jazz music. And many musicians feel the same way. A good friend of mine (an outstanding drummer) moved out to San Francisco, hoping (among other things) to break into the scene out there. Long story short, he ended up being so disgusted with the way jazz is played out there that he ended up not playing it at all. He joined a King Crimson type group and is playing just a couple gigs a month for fun. And so it cuts both ways. There's more than a few jazz musicians, and damn good ones, who are tired of playing those half empty jazz clubs and thus are looking into other avenues of expression. IMO, as long as the music is still good, and the person playing it still believes in it, than it doesn't really matter if it's called jazz or something else.
I will say that the overall culture probably plays a significant role in influencing what the average person listens to. Mainstream culture is pretty far from jazz aesthetics, so it takes some strong interest and (self)education for someone to like jazz enough to go see it live.