At MIT Press they've moved to Word with the eXtyles plugin as their preferred manuscript/intermediary format, and InDesign for final layout. I'm not sure what precisely eXtyles does, but it appears to produce some kind of XML-based workflow that lets them retarget books to both InDesign and ebook formats, as well as process them through various scripts (e.g. for indexing).
They appear to still accept TeX manuscripts as a "not preferred" option, with their preferred approach to those being to convert them to Word+eXtyles ASAP, via some kind of processor they have. It looks like they still offer a full-TeX pipeline if authors insist, but it's deprecated and not done for most books anymore (and they won't produce ebook versions of your book if you choose this one).
If it's just equations (i.e. using no TeX features besides the $equation syntax$), that's what their conversion workflow is for. You can submit your manuscript in simple TeX and then they convert it to their preferred format with some scripts. I believe they'll also accept Markdown extended with TeX-syntax equations (not sure if that's official, but I know one author who submitted a Markdown manuscript w/ TeX equations... though he got the proof copies back as Word, post-conversion).
Ah, now I understand: When you wrote "In book publishing it's shrunk to a very small niche, even in technical areas", you mean the "technical areas" that don't use equations in their books.
My background is blinding me to the fact that books with equations is really a small niche market. That small niche is completely dominated by LaTeX.
Really? What has it been replaced with?