It definitely does still exist, at least in my region anyway. There are less and less customers on it but our switch is still chugging along since the late 70's.
I've worked on our distribution frame and seen more "out" orders than "in" orders though. A lot of people also getting naked DSL, where it's just a connection straight to DSLAM. It's kinda sad to see the service slowly die out, but at same time I can't blame people, with cells, it's just an unnecessary cost to have two phones. I had one for a while but cancelled too. I felt I would miss having a "desk phone" and was going to look into voip options and I have yet to do it. So I'm doing fine without. I may still want to play around with voip at some point though.
I've worked a bit on the POTS system myself at work, mostly cross connecting customers to the switch/dslam at the frame which looks like this:
I don't work on it much anymore though, we used to have a dedicated guy and I'd go do the orders if he was not in but now the field techs do it as there's not enough orders for a dedicated person. I work a bit on the software side of the switch though, mostly surveillance to make sure it's performing well.