I think it’s neither a buzzword nor an emerging trend, it’s just a term that designers have coined to get themselves into other areas apart from products and interactive devices. It’s basically a business pitch that design principles can make services run better. Look at it this way, there were a lot of college grads who graduated with a great knowledge of industrial design, but the market could never absorb all of them. Some of them loved designing things, so they wanted to find a new opportunity to use their skills, and that opportunity was services. Some service design principles genuinely offer advantages over other service management principles, so those people are onto something serious.
Service design in more than a buzzword, it’s the indicator of the way in which civilization is moving.