Not even close. There are plenty of amazing modern bands out there write now who are churning out wonderful music. I'd say a good portion of my favorites bands are more modern, though it's doubtful you'll hear any of them on a top 40 radio station.
Personally, I think Nirvana sucks, so I couldn't care less if no band ever tries to come along and replicate them. As for Seether.... seriously? Uh, ok.
As for good mainstream bands, I think Muse and Radiohead are certainly worthy of that title. You could argue that Megadeth are more or less mainstream, considering their last 3 albums alone have broken into the top 10 on the billboard charts. They still sound as good as ever to me. Hell, "Black Clouds & Silver Linings" debuted at number 5 or 6 on the billboard 200.
There are lots of great bands out there; you just need to look beyond what's being played on the radio and at dance clubs.