A Dwarf Priest is one of my very favorite WoW blogs. The author writes about exactly one topic – Priests – and she does it very well. So when she says that Shadow Priests are "on the endangered list" in Wrath, I think there's probably some truth to that. The core argument is that Shadow Priests' utility is not at the point it was once at (group mana regen is not unique any more; Shadow is not as important for raid synergy), but their DPS has not (yet) been increased accordingly.
One reason why Shadow's DPS is low has to do with spell coefficients. You know how items with +damage or +healing (or now spell power) always say "adds up to [however much] damage"? The coefficient on a spell is what determines exactly how much is applied. Generally it's based on cast times – Greater Heal gets 86% of +healing applied, while Flash Heal only gets 43% – but there are exceptions for spells with added effects, such as Mind Flay and its snare.