This is entirely false. You would likely be surprised at the number of people still on dial-up for one reason or another, the use of modems for secure transaction and "cash-less" system backups, and so on.
Yep.
Here in Australia its not uncommon for an ISP to also provide a dial-up service along with broadband for backup, or whatever other use a person may have of it. Its not really charged for, more of a complimentary bonus, but point being its far from "dead".