The series needs to move on to new things.
I'm a more recent hardcore UT fan. I consistently play UT2004's Onslaught and Bombing Run gametypes and play UT3's Warfare and DM. However, I did play UT on the PS2 (and enjoyed it very much), so I somewhat have a feel for the original series.
Coming from the perspective of all the UT's from both the console and PC, I think this series just needs to forget about anything and everything that made the previous titles special and just move on. Forget about Onslaught, Capture the Flag, VCTF, Instagib DM, etc. because we're never going to bring them back to their original glory. Id Software had it right with Quake Live; no Quake title they release is going to revive it no matter how much work they put into new gameplay mechanics or engine rebuilds. The only way to keep people coming to Quake is to make it easily accessible to everyone in the form that made it popular in the first place and move on. You can't make money by directly selling the milk that came from your dead cow, you need to do it in different ways (like... getting paid to perform on an acting show to see how much of it you can drink before you puke).
The Unreal series needs to do the same thing. There's no point in trying to enter your 35 year-old horse into the Kentucky Derby, it's just not going to work. If you want your old horse to keep riding, just let your kids on it for a short walk every once in a while. Take it to one of their birthday parties and all the kids there will want to have a ride on it (Quake Live). If you want to race, you need to breed a new horse.
Analogy aside, I do think the series can make a return in popularity, but not by going back to its roots. The series needs to come up with something new and pick one target audience, be it PC or console, and let's face it: no matter what gametypes Epic tries to remake, they're never going to be as good as the previous one. Let the previous titles do what they did best and come up with something new and make the next title do what it does best that the previous titles don't have.
There were plenty of other mistakes Epic made with UT3, but I think the above is the main thing that's killing UT: it's old and Epic is trying to put makeup on it.