The point most detractors are trying to make with this prophecy is that the generation Joseph Smith spoke of must have passed away by now. Therefore, they would have us believe that makes Joseph Smith a false prophet. But their assertion depends entirely on definition of the word "generation."
Through the length of a literal generation has occasionally been discussed by scholars and has been described as between 25 years to 120 years, in the larger sense, "generation" is often used to describe a gospel dispensation or era. Therefore, no one can be certain how long it will be before the temple is to be completed.
In D & C 124:49, 51 the Lord explains why the temple wasn't built earlier. He said that if
their enemies come upon them and hinder them from performing that work, behold, it behooveth me to require that work no more at the hands of those sons of men, but to accept of their offerings . . .The Lord did not require the Saints of the 1830s to build the temple in Missouri, but he also did not retract his declaration that it would "be reared in this generation" (D & C 84:4). We simply do not know the length of that generation, and we have good reason to assume that this temple will yet be built.
Therefore, for this cause have I accepted the offerings of those whom I commanded to build up a city and a house unto my name, in Jackson county, Missouri, and were hindered by their enemies, saith the Lord your God.
However, the prophecy in (D & C 84:5-6) came to pass less than four years after Joseph Smith received it. Verse 5 states that "this generation shall not all pass away until an house shall be built unto the Lord." The use of words "an house" indicate that the Lord is not necessarily referring to "the temple" mentioned in verse 4. Additionally, the last mention of a temple in Missouri is in verse 4, with the remaining 116 verses making no mention of it. Anti-Mornion critics are apparently unaware that by verses 5 and 6, the Lord had begun talking about temples and priesthood in general. The "house" mentioned in verse 5 was dedicated in Kirtland, Ohio, in 1836. "A bright light like a pillar of fire" rested upon it, and the glory of the Lord filled the temple, manifested by the abundant presence of the Spirit (History of the Church, vol.2, p.428) and many journals of the Saints who were in the Kirtland area during the weeks surrounding the temple dedication show that this prophecy was fulfilled in every sense with repeated visitations of the Savior and of angelic beings, and the receipt of numerous visions and other spiritual gifts.
So in reality, D & C 84 is further proof that Joseph Smith was speaking for the Lord, not prophesying falsely as some would accuse. The remaining question, then, isn't really whether a generation has passed, but whether the Lord can say something will happen that doesn't, or more accurately, whether the Lord ever commands something and then revokes that command. The Doctrine & Covenants records the Lord's warning that "I, the Lord, command and revoke, as it seemeth me good; and all this to be answered upon the heads of the rebellious, saith the Lord" (D & C 56:4).
One Biblical example of the Lord telling a prophet that something would happen that didn't come to pass can be found in 2 Kings 20:1-7. Here the prophet Isaiah visited Hezekiah, who was "sick unto death," and said to him, "Thus saith the Lord, Set thine house in order; for thou shalt die, and not live." Hezekiah, in prayer, reminded the Lord of all of his good works. The Lord, then, responded mercifully to his plea. He changed his mind and instructed Isaiah to go back to Hezekiah and tell him that his prayers had been heard; the Lord would heal him and he would live for fifteen more years. Was Isaiah any less a prophet of God because the Lord told him something would happen, and it didn't, for whatever reason?
Another example of the fulfillment of a revealed prophecy being changed is found in Jonah, chapter 3. Here the Lord told Jonah to inform the people of Nineveh that the city would be overthrown in forty days. Then God, it is recorded in verse 10, "Saw their works, that they turned ftom their evil way; and God repented of the evil, that he had said that he would do unto them; and he did it not (Jonah 3:10).