Who cares if they can compute any function. The important question is, can they learn any function, and can they learn in a way that can generalize? (And clearly they can for many useful domains).
The biologically-inspired nature of neural nets was a steady, mesmerizing flame for machine learning research. A chance to work on an extremely simple, provably universal system that had embarrassingly obvious rhetorical implications for profound-sounding problems like the computability of consciousness, or the computational complexity of the human brain, proved too seductive for the legions of research-moths that fl…
What are you talking about? Deep learning is one of the hottest areas of research today, and a lot of it has to do with neural networks. NN's are the state of the art in several domains. Case in point: http://image-net.org/challenges/LSVRC/2014/results. All of the top entries use convolutional networks; in fact, almost all of the entries do.
The fact that the loss function represented by a neural network can be highly nonconvex is what makes them so effective in the domains in which they are used. See this presentation by Yann LeCun for more info: http://www.cs.nyu.edu/~yann/talks/lecun-20071207-nonconvex.p...
"ML theory has essentially never moved beyond convex models, the same way control theory has not really moved beyond linear systems. Often, the price we pay for insisting on convexity is an unbearable increase in the size of the model, or the scaling properties of the optimization algorithm ... This is not by choice: nonconvex models simply work better. Have you tried acoustic modeling in speech with a convex loss? ... To learn hierarchical representations (low-level features, mid- level representations, high-level concepts....), we need “deep architectures”. These inevitably lead to non-convex loss functions."
This isn't to say that NN's are going to solve all our problems, but to say that there has been a shift in interest away from NN's is absurd.