Do these statistics mean REITs shouldn't play a role in your portfolio? Not at all. Although they might not provide the degree of diversification from stocks they once did, REITs do offer the benefit of exposure to an asset class that can deliver consistent income and possibly above-market returns.
It's also worth noting that, like stocks, REITs generally have a low level of correlation with bonds. REITs' role as a diversifier from stocks might be diminished, but they can still add diversification to a bond-heavy portfolio.
Just keep REITs' volatility and correlation to stocks in mind when considering your asset allocation. Also, be aware that many stock funds contain REITs, so you might already have some exposure to them without even knowing it.