She is still in office because she hasn't done that many unpopular things, especially in her first 2 terms. If anything, she is as seen as to inactive, but as long as the status quo wasn't too bad... And internally, many see her having a lot of influence on the EU as good.

The general opinion is not a fan of "Mommy Merkel", but it hasn't been enough to propel the actual alternatives from the corners to a position where they can't be ignored, especially since right now the two largest parties (Merkels CDU and the SPD) support Merkels government together. Traditionally they'd prefer partnering with a smaller party, but their preferred coalitions didn't work out. The alternative combinations that would have had a majority are not seen as viable (yet).

And sorry, this isn't great for change, but doesn't make Germany non-democratic. Other possible governments after the last elections would have been more interesting, but I'm not sure if they would have represented the votes better.

Right now it seems like opinions drift away from Merkel in both directions, so it'll be interesting what happens next year. Election campaigns haven't really started yet, so it's hard to judge how the large parties are going to position themselves. SPD has to do something to break out from Merkel, or work another 4 years with her.