Here we go again.
Ever since the APSC-sized sensors came out, people have been wondering if it's just a stop gap, something that's gonna go away in a short while. Well guess what, it hasn't.
APSC is popular. Manufacturers keep making more and keep selling more of them. That's because people like the format. APSC is the new 35 mm.
I'm not sure that its correct to say that APS-C is reason these cameras are popular. It's the price point that is popular. So long as the mainstream public will accept spending $x on a camera that produces acceptable exposures, then the camera manufacturers will do all they can to exploit that market - which is what they should be doing. There is always a market for the best. It is usually a smaller, more expensive market and it's what typically separates the Pro's from the Enthusiasts. I don't think that APS-C is going away so long as the mainstream public accepts the price point.
Now, what I do think would be a problem is if we come to a point where APS-C quality can match that of full frame. Not a good strategy for the camera companies. You would level the playing field between the pro's and enthusiasts (not artistically of course), and you could not charge beyond what the mainstream public is willing to offer. Why would a pro buy a more expensive camera if the quality was the same, and why would the mainstream public pay more than they already do.
What a lot of people want - myself included - is a camera that produces great colors, and sharp enlargements to 12"x18". Digital APSC cameras do just that.
Little point-n-shoots produce flat colors and blow out highlights, and digital 35 mm is beyond the point of diminishing returns for most folks.