Sprite movies aren't dead, it's just a fad to hate on them recently.
Now, the problem with most sprite movies is that people think they are easy, so they dick slap something together and post it. There's a lot of attention to detail you have to still do when making a sprite movie.
Make sure your sprites don't bounce around. Make sure you are doing something more original than "Mario jumps on a flagpole and gets it stuck up his ass".
Good sprite animations get the respect they deserve and the ones which are slapped together by a ballsack with hands get bombed.
My Captain R: The Game Ranger series is done well and gets attention because it's original. I've not made another Phoenix Wrong because it would be pointless. I did Mario: Shell Trouble, getting a daily fourth, and that isn't my normal style.
Anyone who sits there and screams "You stole all of this using sprites!!!!!" just shows how worthless they are. If someone were to draw the same animation, it would be "OMFG STOLEN CHARACTERS!" to "Nice drawings!". It's a double standard and those who apply it really don't think their comments through. I'm surprised they've lived long enough to learn how to use the computer effectively, to be honest.
In the end, just put real effort into your project and don't be cliche.