It is not a matter of debate as there are speakers even today. Declining definitely, but still significant.
http://en.wikipedia.org/wiki/Sanskrit#Contemporary_usage
The 1991 and 2001, census of India recorded 49,736 and 14,135 persons, respectively, with Sanskrit as their native language.[1]
http://www.mangalorean.com/news.php?newstype=broadcast&b...
But surprisingly, today in Mangalore, there is one unique family where all the members are using Sanskrit as their mother tongue and they all interact with each other in this language only. Seems highly improbable but nevertheless, it is true.
I think one reason for the decline is that you need to be pretty intelligent to learn Sanskrit (vs say Tamil or English). I sort of feel that the human race itself was more smart a few thousand years ago. (See http://rt.com/usa/news/intelligence-stanford-years-fragile-5...)