Yes, he's declining. But when you're 30, there's not much to improve right.
We're still upbeat because if you look at the past year, it took an oustanding efforts from Djokovic, Nadal, and Tsonga to beat him. He still gives himself numerous chances and his losses were literally decided by a few points.
Besides, I think the majority of Federer fans just love to see him play. I know I'll be in tears the day he decides to retire and the thought of tennis without Federer is difficult to fathom. He's achieved everything there is so there's not much left but to enjoy the game.
Let's just enjoy what's left of this great champion's illustrious career!