I have been a genre reader all my life. I like fantasy, science fiction, and horror. The order of preference has shifted periodically but that is the general reading preference.
Which also means I am 99% fantasy author and 1% contemporary. But even the com temporary short stories I have written were genre- mystery to be exact. EXCEPT for one little flash piece called Collections which was literary.
BUT a lot of people seem to be questioning the possible market saturation of genre fiction lately. Particularly in YA. Now I don't have a finished YA piece but who knows, I may someday. And I can guarantee that it will be genre. Because I love genre. Now, what happens if everyone is sick of genre? Do I try contemp? Or hope that genre comes back into vogue?
I'm going with neither. There was an interesting discussion on LJ about manga my friend Jason Thompson put up, but in one of my replies I said that genre readers don't suddenly 'grow up' and start reading literary just because they are supposedly too old for genre.
Genre will never die. It is both a useful marketing tool and makes it easy on the genre reader to find books they want. I can tell you in a bookstore I go straight to the fantasy/sci-fi shelves, then horror if they have it, then swing round to YA and then the middle grade shelves. And on the MG and YA shelves I'm looking for- you guessed it- fantasy. 9 times out of 10 that's what I want to read and buy.
So genre will never go away. There will simply be a constant jockeying for first place among all the genres and sub-genres. One will rise but only for a time.