The excellence and popularity of the modern short story is indisputable. Although some may consider it lamentable, fiction has displaced poetry in the modern taste, and the length of the short story seems to make it particularly appropriate to our fastmoving world.

I think both it's refer to the modern short story.


The first "it" refers to the lamentable replacement of poetry by fiction - "it" here is a demonstrative, used at the beginning of a sentence, pointing to that which is about to be stated, named, or mentioned, or referring to that which apparent or well known.

The second "it" does refer to "short story".
No, no-- the modern short story is not lamentable,LiJ! The first it refers to "fiction has displaced poetry in the modern taste". The second it refers to the modern short story, though.
Teachers: We supply a list of EFL job vacancies
Thanks, Feebs and Mister. Simultaneous answers helpe me understand.

Got it.
Students: Are you brave enough to let our tutors analyse your pronunciation?