Is prophecy a gift the ended with the close of the canon? Many of my favorite theologians (B.B. Warfield, J. Gresham Machen, and most Reformed theologians) have argued so.
I'm not convinced. I believe the gift of prophecy (as well as tongues and other 'sign gifts') continue until Christ returns, though I am skeptical of most modern practitioners - especially the ones who have made a name for themselves as wonder workers.
The passage that is most convincing to me is 1 Corinthians 13:8-10:
"Love never ends. As for prophecies, they will pass away; as for tongues, they will cease; as for knowledge, it will pass away. For we know in part and we prophesy in part, but when the perfect comes, the partial will pass away."
When will these prophecies cease? And tongues? When the perfect comes. Not till then. So what is the 'perfect'? Cessationists argue that the perfect refers to the close of the canon and the apostolic age. Others argue that it refers the coming of Christ - so, on this view, the gifts will continue until Christ's second advent. Cessationists point out the the Greek word for perfect (τελειον) is in the neuter. Jesus is never referred to in the neuter, so, the argument goes, this couldn't refer to Christ's return.
I agree that 'the perfect' doesn't refer directly to Christ. Instead, it refers to the state of affairs Christ establishes when he returns - full knowledge, seeing face to face, sight instead of faith, the complete sanctification of believers, the return of Paradise, the complete and total victory of God. Until then, the gifts continue.
Another significant line of reasoning has to do with the purpose of the gifts. Cessationists typically argue that the 'sign gifts' were given to authenticate the apostles message. So, once the apostles and their message had been validated and canonized, the sign gifts passed away.
To me, that's an overly narrow understanding of the purpose of the sign gifts. The gifts did have an authenticating function, but it wasn't just to authenticate the message of apostles but also the arrival of the Kingdom of God, albeit a spiritual kingdom that arrived in seed (but will grow). Jesus preached and embodied the kingdom and sends his disciples out to do the same (Luke 9:2; Luke 10:9). Joel 2:28-29 connects the pouring out of the Spirit and prophesying to 'the last days'. This passage is quoted by Peter in Acts 2 on the Day of Pentecost as he argues the prophesy was being fulfilled in the events of that day. Hence, it is a sure sign we are living in the last days (Heb. 1:2), the days when the kingdom of God advances and the strong man (Satan) has been bound (Mark 3:27, Rev. 20:2?).
Moreover, it's clear from the New Testament that the gifts of healing, tongues and prophecy weren't limited to the apostolic core, but extended to the members of the church. In Acts, Stephen and Philip, two deacons (but not apostles) are said to have performed miraculous signs (Acts 6:8 & Acts 8:6). In this vein see also Galatians 3:5, 1 Corinthians 12:7-10, 28).
Moreover, several other passages deal with the churches responsibility (ongoing) to test prophesy (1 Thess. 5:20, 1 Cor 14:29, 1 John 4:1-3). What I see about prophecy as it is practiced in the church is that is must always be subject to the Word. In the early church it was subject to the words of the apostles - whatever portions of it the church had. In our context, it must be subject to the written Word.
The abuse of the gift of prophecy goes back to the Montanist heresy of the 2nd century (though historically accurate, it's probably an overstatement to call it a heresy). Some have actually referred to the Pentecostal movement as neo-Montanism. The Montanists made claims that the new prophecy was superior to the old, higher than the apostles and even higher than Christ's. Many modern prophets seem to be cut from the same mold - 'so what if Scripture contradicts what I'm saying - I've heard it straight from God'.
This week I learned a cool Latin phrase (thanks to Justin Taylor's blog): abusus usum non tollit (“Abuse does not take away proper use”). Fantastic. Abuse of prophecy doesn't mean proper use of it doesn't exist. In fact, it seems evident from Scripture that prophecy was always abused (how many false prophets were there in Israel? At least a few billion!). That is precisely why the church is called to be discerning, but not dismissive.
Hope that is somewhat helpful.