Humor and adventure and drama are hot. Dull and boring are not.
Kids come in all flavors. One of the things that I love about my job is that every year is different. A different mix of kids. Two years ago, my class craved Eragon and other fantasy books. When they wrote their own stories, castles and dragons and magic ruled. Last year's class, it was Nate the Great and the Magic TreeHouse. They wanted to solve problems and learn about other countries. This year's class is immature and silly. They want to laugh. Dav Pilkey's Ricky Ricotta and its villain, Dr. Stinky McNasty, are the current favorite. And the classics never go away; every class loves Wanda G'ag's Millions of Cats, even though it's 80 years old.
I think we're talking about 2 different things here. There's trendspotting--what's hot right now?--and Toothpaste is right. There's just no point to it. The real money is in being the trendsetter, but that's pretty hard to control.
But when publishers say "know the market," they mean something different. They mean, study what kids are reading right now, and figure out WHY. Diary of a Wimpy Kid is a great example. It's NOT a great story, at least not in the sense of having a strong plot or compelling adventures. But it is laugh-your-pants-off funny in places, and because of the cartoons mixed in, it is very easy to read.
They also mean, know what's already out there. Don't try to publish something that's already been done, unless you can do it even better. Are you bringing something new to the table? A new twist, a new voice, a modern perspective? Are you able to show that when you pitch your work? They're not looking for "vampires are hot right now, and I have another one!" They're looking for, "you haven't seen anything like this! But I know it will sell because it's as funny/exciting/quirky as this other thing that is selling really well right now!"
And the teacher in me has to say: There are no stupid questions. Let's not lecture each other for asking questions, even if we don't see the usefulness of them. They spark discussions of the craft, and those discussions could lead someone to becoming a better writer.