I don't think that I'd say La Femme is stagnating. There are new products for her in the RMP every week. Vendors aren't making anything for V4 any more. Maybe there will be V4 fits for hair or dynamic clothes, but you don't see stuff made specifically for V4 these days. This suggests the customers have moved on.

It is hard to compete with V4's backlog, though. I would guess most of us are not as skilled as ssgbryan or primorge. We're not going to open up the hood and tinker. Even converting clothing is pretty inconvenient for the average user.

I use both V4 and La Femme (and others, too). But V4 more, because there just isn't enough support for La Femme yet. Clothes, textures, morphs. If you want to do a render of, say, a block party in Mumbai, you need more than one or two "ethnic" textures. I think there's only a handful of vendors making stuff for La Femme, and they can only work so fast. (There's also a tendency for characters made by the same vendor to look somewhat alike, further limiting diversity.)

I am kind of excited about Dawn 2. It sounds like they've really put a lot of thought into her, and are doing some innovative things. They may not work out, but why make a new figure if you're not going to do something new? And it seems like they have enough people working on content that she'll have decent support.