Ya. Apparently they still make cassette tapes.
Who is this "they" of whom you speak? My sister showed me this video and asked if the kids' reactions were exaggerated. I did a little digging, and as far as I can tell, of the four cassette manufacturers whom I patronized the most in my teens (Maxell, TDK, BASF, and Denon), only Maxell is still making them. And they're making only one grade of tape nowadays, Type I - not the higher-end chromium dioxide ones I spent all my money on in the 80s (let alone the really good "metal" ones that were usually beyond my means).
As far as I can tell, no one is making portable cassette players any more, and I'm not sure if there is still such a thing as a console deck or boom box that plays them, either. So it's not surprising to me that kids no older than about 13 have never actually seen one.