Is agile adoption leveling off?

There has been a big discussion the last few days in the Agile Testing Yahoo! group about this article from The Industry Standard: Agile progress report shows adoption has hit a wall.
I don’t buy the premise that agile adoption has peaked, but the article mentions some of the challenges that some organizations face when considering agile:

Some organizations, however, cannot adopt agile methods, Ambler said. “It’s simply because of their own organizational culture.” He said. “They have systemic challenges,” said Ambler.

“It’s a good way to do small projects, at least from my perspective,” said Rich Peters, senior software engineering manager at Braxton Technologies. “In our environment, we can’t use that technology because we have government requirements about how we do our development. But for internal projects, it would be fine.”

Ambler cited issues with agile. “One of the biggest problems right now in the agile community is we’ve gotten really good at developing siloed systems. That’s not useful,” he said.
Some challenges to agile development include entrenched processes, enterprise discipline, compliance requirements, team size, and application complexity.

I particularly loved this line:

Ambler also said research found a disparity in what developers and managers thought was happening with agile; 61 percent of developers thought they were doing agile development while 78 percent of management thought agile development was in use.