Who decides what makes a genre or sub-genre suddenly "hot" in publishing? Is it the authors, the publishers, the public, something in the air?
I think it's all about what's going on in the big wide world. If a genre or sub-genre suddenly takes off in popularity, I believe that's a reflection of a sort of collective mindset among the general public.
For instance, right now in Romanceland, paranormals are hot. Vampires, werewolves, some combination of both, ghosts, etc. are all the rage. I think this popularity is really a reflection of the current generalized fear of the person who looks like us and sounds like us but is evil and wants to destroy us. And if that evil entity is vanquished? Whew. If the evil entity turns out to be not so bad after all? Also whew. Our fears are, it seems, groundless...or so we'd like to feel.
I think Westerns fell out of favor because the idea of the "wild west", where anything goes and him the with the fastest draw wins, is not in line with the
increased sense that we need/want more law and order. In other words, the prevalent thinking has undergone a shift, and suddenly the "wild west" ain't so attractive no more. Now, I'm sure many, many Western romances have NOTHING to do with gunslingers, etc., but I can easily believe that's why the general public has shied away from them in recent years.
I think medievals have never been as popular as Regencies because of the idea that folks were dirty and had rotten teeth and stunk, etc. etc. The way Hollywood portrays the Regency, and the way some romance writers portray the Regency, everything is clean and tidy and polite and wonderful. No thought to the poor sods working the farms or in the factories -- because what the public wanted, after 9/11 especially, was clean and pretty escapism.
To use another, non-romance example, I don't think THE DA VINCI CODE would have been nearly so popular if it had been published before we became aware that the Catholic Church had been covering up sexual abuse by the clergy for years. NOW people can easily believe the church would indeed be capable of a huge cover-up. Fifteen or twenty years ago? Not so much.
So to my mind, the popularity of a genre or sub-genre is, to a large part, dependent upon what's going on in the collective minds/hearts of the reading public. That's not to say authors and publishers don't also have some influence. After all, they're people living in our time, so their feelings, and therefore their writing and buying decisions, are going to be influenced by our times.
But I truly believe that when it comes to making a genre or sub-genre suddenly "hot," it's not simply and only because the writers decided to write about it. People were writing and trying to sell paranormals many years ago. It's not because publishers suddenly decided to make it so, based on some kind of whim. It's because the general mood/feelings/concerns of the public (and therefore the authors and publishers, too) coincide with aspects of those books.