Is it just me, or have things on the Nerf side been lackluster recently? [...] I guess there are just limits to what the Nerf group at Hasbro can develop, due to ammunition size and safety constraints.
I think it's a combination of both this and the fact that pretty much every useable category of weapon has now been done.
You've hit the nail on the head here. (On the other hand, if you like gimmicks, Nerf's recent offerings have been rather good.)
Nerf also seems to be releasing a lot of repaints recently, probably for similar reasons.