I've always thought that prog isn't so much a genre as an adjective. Progressive describes the property of pushing forward, finding new sounds, not resorting to tired cliches and formulas, essentially, making music that goes somewhere (as in progress)...
But when James holden says "prog is on its last legs" what he's really saying is that the contemporary 'prog' sound-of-the-moment(as thrashed by the ever-ready-to-exploit-something-new press, and played by people like him, Sasha, etc) is becoming tired. I totally agree! Music becomes tired, genres come & go (case in point speed-garage, haha)... There's only so many times you can listen to the recombination of elements that make up a so-called 'prog' track before you start to want for something new. I happen to know that one can just go out and purchase a sample CD called "progressive house construction kit" or "the sound of prog" or any number of other ones and all of a sudden have at their disposal the exact same range of sounds that James Holden does... but when they make a track using these, to me, it isn't progress... its following a formula and rehashing a sound. Why the hell bother?! Find something new, go with it, create a new sound and push forward... I'm sure thats what he will do!