Specular is part of phong shading, it certainly hasn't "practically vanished".
I get the feeling we're not talking about the same thing..
A specular, as i know it from the engines i've worked with (mostly UE 2.5), is a simple cubemap effect, IE, it takes a base texture and distorts it around, or uses a cubemap from a Combiner, the effect has often been used in older games to create a Chrome effect texture, or, if supplied with an Alpha layer, is applied to a texture to give it some shine.
However, the effect does not actually reflect anything in the game world, it's just reflecting it's own source texture/cubemap, and is unaffected by outside light sources.
Whereas with normal/bump maps and phong shading, they either reflect the world around them, or atleast lighsources in the world around them (like the sun).
The old method, which i know as a "Specular" from UE2.5 modding, is not something i've seen in games for a very long time, not since normal mapping became a normal part of game engines.
Care to elaborate your final sentence?
What is there to elaborate on? Bad use of normal maps is bad use of normal maps.
I've seen my fair share of that as a gamer and casual modder, and must belive you have also.
And it can be lots of things, surfaces that seem too "shiny" (like a dry concrete texture, that for some reason shines as if it where metal, should have darkened that Alpha layer a bit there mate), textures that have no visible shine or effect to them, but when you look at them in the SDK, they have a normal map that's made allmost invisible by it's near pitch black Alpha layer, which makes you wonder why the hell they even bothered, they could have cut down on loading times and just used a texture (don't use an effect unless you are actually, you know, going to use it).
Or it can be just poor design, like a 2D artist who apparently didn't understand that it's the normal map's job to decide how light is cast on a texture, to provide detail, and the Alpha should just be there to decide how reflective it is.
I've come across some amazingly elaborate Alpha layers, that obviously took the guy who made it a lot of time painting in light and shade, only to find that if i spend 2 seconds to fill it in with a solid grey, the normal map was allowed to do it's job, and the ingame texture looked 5000x better for it!
Sometime less is more, don't get all artsy on the bloody Alpha layer, let the normal map do it's job, that's what it's there for.