According to a recent EMA survey, the number of organizations implementing SLAs dropped to 48% in 2005 from 83% in 2004. This is curious because adoption of "best-practice" frameworks like ITIL, MOF, and COBIT continue to increase, and these frameworks (particularly ITIL and MOF) focus heavily on service management disciplines. Are IT organizations dumping SLAs? I doubt it.
First off, I'm not sure that I put a lot of credence in the survey. The sample size (48) is pretty small, so may not be wonderfully representative of the industry overall.
Second, during the last two years IT organizations have been focused almost exclusively on regulatory compliance and infosec issues. SLAs have taken a back seat, at least for the moment.
Service management is a proven and effective strategy for managing IT resources, and SLAs are a core component of service management. I'm sure we'll see an up-tick of SLA projects in the coming few years.