I am getting the distinct feeling that the 7D II will be a 7D with improved video...It's looking more and more like I am going to be investing my money in a 5D III.
Well they already suckered me in with a 5DIII, but I'm still holding out some hope and interest for a 7DII. Mixed emotions. On the one hand, I'd love a 7DII with a modest sensor improvement, 5D style autofocus and a few other goodies like dual card slots, improved weathersealing, touchscreen, etc. But, on the other hand my credit card would be a lot healthier if it turns out that most of the improvements are in video and I can keep my current 7D as a second body.
I'm not one of the those anti-video freaks. I fully understand that video increases demand and reduces the cost to consumers. But, I'm concerned that we are reaching the point where compromises will have to be made to accommodate video (or it might be better stated the other way – Canon is unwilling to make compromises to video to accommodate stills photographers).
Actually Jon, some of your posts have been kind of discouraging to me. Your very thorough dissection of the difficulties of achieving ever-higher high ISO performance makes me think that Canon is likely focusing on improvements and research that offer the best return on investment (which of course they have a corporate responsibility to do).
In that context, enhancements that improve usability and convenience (like hybrid viewfinders) likely offer a much better return and greater opportunities for significant advancements. I suspect we may be facing a long future where sensor technology advances by very small steps, while other features keep getting piled on.
Actually, I don't know that anyone should be surprised by that. We've been spoiled by the massive advancements that occurred during the past decade. It's only natural that, as the technology matures, the pace will slow down and we return to a pattern that is more consistent with the previous 50 years of SLR development.
Sorry to be discouraging, however I don't think it is useful for anyone to get extremely high hopes over physical impossibilities. ;P Better to get your hopes up over ACTUALITIES or ACTUAL POSSIBILITIES.

I don't aim to discourage, I only aim to be realistic, and redirect people's hopes towards things they might actually get at some point in the future.
High ISO, at it's best, could double in performance, maybe twice. Double Q.E., and improve color filtration at the pixel to allow more light (and probably a couple other things like using black silicon and such to fully get us that two stops). That gets us ISO 6400 performance that looks like ISO 1600. That's not bad, but the chances of that actually happening are pretty low...doubling Q.E. would be EXTREMELY difficult. Of course, there will always be the option of larger pixels. That can be achieved by reducing megapixel count, or increasing sensor size. Maybe something like a ThreeCCD will find it's way into CMOS cameras, giving us the maximum full-color potential in a single package (that would be amazing, although I suspect the camera body would be rather large.) In the long run, not really sure how long, I foresee a sensor larger than FF finding a common home in DSLRs.
As for the rest of your post... Maybe we have been spoiled. I think there is still a decade of exploration left before we actually reach the stage your describing. We still have to actually employ discoveries that improve Q.E. at room temperature, that improve total transmission of light past the color filter, that increase the charge capacity of each pixel (despite shrinking area), etc. There is research and some patents in this area, but they have not yet actually been employed in stills cameras. Some of these discoveries have been employed in certain types of video cameras, usually in the security industry...however just because they have been employed somewhere does not mean that growth in sensor capabilities in the stills photography department will suddenly stop. We have a long ways to go before we actually REALIZE ISO 6400 in the future that looks like ISO 1600 does today, and at some point, we will realize that full potential.
Furthermore...a lot of the advancements in sensor technology we talk about here have been employed in stills,
but not by Canon. Not yet... That means Canon has a LOOONG ways to go before they hit any kind of technological wall. They have a LOT of things they could implement to improve IQ, particularly at low ISO, but even at high ISO. Maybe not a literal two stops better high ISO, but something better. I certainly have the hope that Canon will start to do something radical with their sensor technology, but it gets harder and harder to actually EXPECT that hope to become a reality when each successive CR rumor about the 7D II talks about video. A Hybrid VF certainly sounds cool...and I certainly HOPE the EVF is an option I'll be able to enable at will. However with my realistic mind, I can't help but EXPECT the EVF will only activate if I enable video mode, which eliminates the option of it being a user-selectable thing for stills photography.
I don't just expect that, I HIGHLY EXPECT that, because, well, you know...
it's Canon. If there is one thing they do well,
it's THE TRICKLE. They will
trickle out the technology, not that trickling helps their bottom line or anything (a user-selectable Hybrid VF would probably triple their bottom line with the 7D II alone), just because that's what they do. So, I don't foresee a true Hybrid VF where I can choose between OVF and EVF at will whenever, video or stills. Again, not to be discouraging...just being realistic. It helps me better control the flow of my funds to things that will best suit my needs, and redirect sooner rather than later so I don't sit on my hands missing opportunities while I WAIT. The aura of the 7D II has been fading for me for a while, and while I still hold out hope that it will be this great and wonderful thing....it's Canon... I have to be realistic. My money is best invested in a 5D III, I feel I am no longer able to escape that realization, and I think it's ok to share that.
So, your right...Canon technology will probably advance in very small steps. But I don't think that's because were approaching wall that will stop technological advancement. Other CIS manufacturers will continue to push the envelope for several years to come at least, while Canon...well, Canon will TRICKLE. I love Canon, don't get me wrong. They deliver the goods in every other area except sensors EXCEPTIONALLY WELL. I couldn't live without Canon glass, their ergonomics and button placement are just about perfect, I think their 61pt AF system is a thing of wonder, and when you feel a 1D X firing off like a machine gun...yeah, I can't choose anything other than Canon. That doesn't mean there are not things about Canon that irk me royally, there are...like THE TRICKLE...and like their low ISO read noise when I'm doing landscapes.

I could very well be proven wrong with the 7D II. I sincerely hope I am!! If I am, thats great, and certainly OK for me...there is no way the 5D III will be a bad purchase, for me or for anyone else in the same boat as I am in. If the 7D II hits the streets with 24mp (30k FWC, which would mean ISO 3200 would be usable), 10fps, 61pt(esque) AF system, Hybrid VF, 5D III level weather sealing and all the goodies we can imagine, those of you who hold out will certainly be richly rewarded. I'll probably sell my 7D and pick up a 7D II for a second body at some point in the future, too.