I think a Japanese student visiting my campus put it nicely...he said that it's completely inaccurate to say "Japan doesn't like Ayu anymore." In fact, he was surprised that I'd suggest such a thing. It's more like she has her fanbase as any other famous pop artist has his/her fanbase. Japan is not smitten with her anymore, but that doesn't mean she isn't liked by a good many people. Holding her up to the standard of her previous popularity is basically insane, with ANY artist, especially in the age of filesharing, globalization, and less-than-accurate charts. And by the way, I don't think he was a fan himself, and seemed pretty objective about it.
As for Ayu retiring, well, she could use a break for sure, but she said herself that music is her life, and I don't see her stopping anytime soon. And I'm perfectly okay with that no matter what direction she decides to go next.