I think Kanto was the best just because it was still new, then. While the newer episodes have just as good, or better, plots, the show itself has gotten a little repetitive and way too predictable. I honestly stopped watching in the beginning of Johto and have only caught a couple episodes after that... But if I had all the Kanto episodes on DVD, I probably wouldn't watch those episodes much, either.
The games are still roxxors. I honestly wasn't going to buy anything from RSE, 'cause I thought they wouldn't add up to the original games, and didn't/still don't much like the new pokemon designs. But the game itself was still surprisingly good, and I liked the enough pokemon to make a little team. <3
So no, I don't think the series is going downhill. Plenty of my friends are still into pokemon, and one of the school clubs pulled off a pokemon-themed comedy show earlier in the year. I missed it, but heard it was fairly neat.