C++ hasn't been compiled to C in any production compiler for a rather long time.
Well, at least he seems to know that cfront was once the only way to use C++.
Apple's not going to spend several million dollars of engineering effort to create another C++ compiler if nobody's writing C++. Companies aren't going to spend money on sending representatives to C++0x standards meetings if their customers aren't using C++.
People are realizing that they don't have to program in C++ for many different areas. That doesn't mean that they're aren't still writing parts of their apps in C++. And there's a lot of existing C++ code out there that still has to be extended, debugged, and maintained.
I stand by my assertion. Most people aren't writing in C/C++ anymore. Even the embedded vendors find ways to avoid it.
In any event, we're talking to different sets of embedded vendors. The embedded vendors I talk to are still using C++ and so are their customers. Maybe I'm talking to the less profitable ones, though. ;)
C++ hasn't been eradicated, but --- even in some embedded environments --- it is no longer the go-to language (Java seems to have that honor now).
Bringing this back to Stross' point, though: ASCIIZ strings aren't more relevant to modern computer security because of C++. Obviously, C++ disfavors them (though most C++ devs I know still drop to charstars when std::string gets frustrating), but, more importantly, they have almost nothing to do with Java, C#, Python, or PHP string handling.
I don't think they're orthogonal: standardization efforts don't happen until you have significant industry adoption of technology X from several vendors and they (and/or their customers) decide it'd better if their implementations could interoperate. Why do you think they're completely orthogonal?
It's possible, of course, that the C++0x (C++1x?) standardization round is taking place on the peak or the decreasing side of C++ adoption (due to the increased complexity of C++, users finding benefits to non-C++ languages, movement into areas where C++ doesn't help much, etc.). But I don't think that's the case; perhaps we're on a plateau of C++ adoption, if anything.