When agents take on clients, they always promise the Moon. Every client is a genius on the first call. God knows how badly the publishing industry in general is suffering in the current economy, but it's possible that your agent's expectations about markets that were reasonable a year ago have run into the brick wall of the recession.
Indeed. We reach.
Like I said, I have no ill will toward my agent--she really believed in me and my novel and worked her cute little caboose off with the pre-submission revisions. I'm just saying that pessimists tend to get it "right" more often than optimists.