Problem with this "getting left behind" stuff is, familiar sells. Objectively, none of the Honda or Toyota sedans (Civic/Corolla or Accord/Camry) are class-leading, offering the best economy, offering the most this-or-that. But they continue to be best-sellers. The two sedans pretty consistently praised by automotive fans and media, the Fusion and the Malibu, are often not in the top-10 lists, and sometimes not in the top-20 lists either.
Honda has apparently concluded that small car shoppers want a softer Civic. It's not that Honda can't make a Civic that is hard-edged or a class-leading corner carver. Clearly it can. It's that Honda has built the car it think will sell the best. Whether Honda is right remains to be seen.
You can see time and time again the results from mistakes in the industry. None of the automakers who built "poor" cars did so with the objective of building a poor car. They did so because they thought, based on the information that they had, that what they were building was the blend of comfort/performance/economy/value/whatever that consumers were looking for. Sometimes they've gotten that decision right, and sometimes they haven't.
I'm not here to defend the new Civic. I haven't driven it nor really gotten a close look at it. But based on what seems to be selling today, I am going to predict that it'll be a pretty good sales success for Honda. Is it a Civic that a boy-racer wants to see? No it's not (though those Civic trims ARE available). It's a Civic that America apparently wants to see.
It's exactly the same with the Corolla. It's perhaps the least dynamic of the small car bunch, but Toyota sells every one of them that they can build, for better or for worse.