Maybe, but nearly 60% of UK Merc S-class sales are now diesel so somebody wants them.
All to do with the tax savings (on a company car) running to several hundred quid a month, not the mpg per se.
Great car though the LS is, it's not quite in the same market as an Aston or Ferrari.
I imagine there will always be a place for the big petrol motor (I have a 3.5V8 of my own :D ) but with current emphasis on CO2 emissions the tide is shifting.