Canon is caught in a trap of its own making, as much as Nikon's.
Agree 100% with your analysis.
Itâ€™s interesting what Canon will decide about the 1.3x format.
No matter how many megapixels a 1.3x camera has, it is bound to remain a specialized sports camera - good if you have a big white lens bolted on it, not so good otherwise.
At the same time, if Nikonâ€™s D4 has 20+ megapixels, it will be an excellent general purpose pro camera, not just a sports camera.
If Canon continues with the 1.3x format, they will be competing with a specialized pro camera vs a general purpose pro camera.
The specialized camera seems to be at a disadvantage here.
So, it does make sense for Canon to move the 1D series to FF.
The thing is, this already made sense back in 2007 and yet Canon did not do it when the 1DIII was released.
But if Canon does decide to move the 1D series to FF, some very interesting opportunities will open up for the 5DIII and the 7DII.