In the same spirit of light-heartedness - I'd beg to disagree :)
It is one thing to say that 'character' actors of one stripe or another continue to exist and do well within the industry (there will always be the need for *some* to flourish, and there has always been a concomitant industry emphasis on the fact that a certain primacy is accorded not to casting characters, but to casting matinee idols who fill the lead roles). This has always been the case in the industry - because all good drama tells a story, and in a story, we like our heroes to be aspirational (so they must be cast better looking, better muscled, better groomed than the majority of us), and we like our villains to be unpleasant, our fools to be stupid and so on (so they must be cast preferably uglier, more dishevelled, colder, more homely etc. than the majority). Every generation has its 'pretty boys' who get by on looks as much as talent (this is as old as Valentino!) - some combine phenomenal talent with good looks (Peter O'Toole, say) - and there are always character actors to support. In recent generations, we have been lucky to have seen a little more attempt at making our 'heroes' ambiguous, which may lead to roles being taken by, say, a Cumberbatch rather than a Colin Firth.
BUT that the industry has closed ranks against a wider prevalence of 'characterful' casting seems to me undeniably true. One has only to look at the sort of students who are represented at drama schools to realise what is considered 'saleable' in the industry, and how much it accords with the dictum that all casting these days aspires to the condition of Hollyoaks. I cannot fail to look at the leading players in the industry in, say, the late 60's, and be struck by the fact that MOST of them would hardly be snapped up by drama schools or agents today. Would individuals as idiosyncratic as Oliver Reed, Peter Sellers, Warren Mitchell, Ron Moody, David Warner, Patrick Macnee, Malcolm Macdowell (and this is, of course, just the men) be considered good employable prospects today? Might even an Albert Finney have had a struggle to make it?
I think the industry was undoubtedly a different place in years gone by. My theory is that, not least, the prevalence of interest in screen acting that has built up in recent years - necessarily as cinema, TV, music video and the Internet have successively become ever more important in our lives - has drastically changed casting notions. They seem to have 'Americanised' in accordance with the canons of good screen acting practice (with a consequent dismissal of the more 'ordinary' and the individual), and what is also true is that, in screen terms, casting must be necessarily more specific in the first place. The sense in which someone who is not, perhaps, 'ideal' looking can still portray a great hero on stage - where there is distance from the audience, and a continued expectation that disbelief may need to be suspended - does not exist on screen. Hollywood standards have certainly always demanded that, say, figures known historically to have been quite unremarkable looking are shown to be shining demi gods. This appears to be seeping wholesale into our mainstream cinema and TV industries - e.g. Rhys Myers's casting as Henry VIII in the Tudors'. And this is just one example of how these influences are shaping current casting policies.
I'm sorry if that wasn't a funny post, but I think it contains some thoughtful points. It's to me a great pity that the sorts of opportunities open to character actors in past generations appear to be drying up now. And I regret it.