An article from Mike Johnston speculating about the future dominance, or not, of "full frame" cameras (with a sensor the size of the frame in a 35mm camera, so far most have smaller sensors).
I think that as price of sensors probably keeps falling, what will be a deciding factor is the size of the camera. Snapshooters don't want a two-kilo camera. But pros don't mind, they just need the best, fastest, and most reliable. So there will still be cameras and sensors of various sizes, only question is where the balance will be. I think it won't change all that much, because while bigger sensors do become cheaper, smaller sensors also become better. In the long run, it'll change towards small sensors, because most people don't need short depth of field, and their need for image quality has limits, while Moore's law doesn't (we assume).
Anyway, Mike says it well again on a different point:
"So why isn't Olympus making a whole range of point-and-shoot, and pocket, and rangefinder cameras around the 4/3rds sensor by now? Whither Canon's pellicle mirror as a digital solution? Where is the luminance-only sensor? Where is the larger-than-FF integral DSLR? Where are the square-sensor cameras? Where's the DMD? (The DP-1, nice though it is, meets the DMD spec in only a couple of ways, and misses the concept by a country mile in several others.) ... Why couldn't the D700 have been the size and shape and body material of an FM2 (or, heck an S3), and more clearly a single-shot camera, so as not to compete with the D3?
Where's the creativity?"
Heck, in the fastest-growing industry of the decade, who can afford to experiment? :-)
And another thing which I've bitched about myself. Mike sez:
"...there is currently a "fashion" that dictates that good cameras have to be big and small cameras have to be compromised (i.e., "entry-level," cheapened), and I'd love to have options that break this tyranny, even if the basic fashion continues unabated—specifically at least a few (more) choices of really high-quality, premium cameras that are small..."