Laurance,
You pose a very interesting question, one I've found myself contemplating quite often. It does seem that it is very difficult to come up with anything new - Frank seems to be bemoaning this fact - but that seems to me that finding a new way to see is not neccesarily the reason most photographers are working.
The way I see it, people as the subject, is what differentiates a lot of photography - especially art in the photjournalistic style, or even straight photojournalism. Honestly, I am usually bored by landscape and still life photography, even the best of it - painting seems to have much more expressive control and less hackneyed ways of presenting these subjects. For me, people, and the events in which they are involved are enternally interesting, and the imaging of people is right in the wheelhouse of photography.
I think about it this way - imagine if no one photographed people and what they were doing for an entire decade? That would be a huge loss in my opinion - for art, and for posterity. So perhaps it's true that the massive proliferation of imagery does seem to make it less "special," but of those countless images being made, some will be drawn on in the future and looked to as Art, or history, or both.