While I can see Canon not wanting to compete against themselves, they still have to compete against Nikon, and increasingly Sony...
I don't agree, in terms of this discussion. The competition between Canon, Nikon, Sony, etc. really takes place in the entry-level dSLR space (and of course, the P&S space). The number of people who's first dSLR is a FF body is an insignificant fraction of the market. So, by the time someone buys a FF body, they have brand familiarity and likely a set of lenses - Canon will have the data to support that (that's why the online product registration collects info on other products already owned). The reality is that very, very few people switch brands (despite the frequent threats to do so, which are mostly empty). Sure, there are high profile 'defections' where Canon or Nikon provides incentives, but for the majority, if you have a lens or two there's too much inertia to change brands.
Regarding updating the AF, history has shown there's no need. First off, Nikon's AF isn't necessarily 'kick-ass'. Just like more MP doesn't automatically make a sensor better, more AF points don't automatically make for better AF. Nikon's systems have never had the high-precision points that Canon offers, for example. More importantly, Canon can look back at sales records. The 40D, 50D, and 60D use the same AF. The 5DII was a huge success, using the same AF as the 5D but with more MP. So who's to say a 5DIII with even more MP and still the same AF won't sell, especially stacked up against a 1D X with less MP?
I know it's not a popular opinion, but don't be surprised to see the 5D's AF reused on the 5DIII, or if not that, a token improvement. If they give it a high MP sensor, compared to the 1D X, they've got to not give it something else. Weak AF, only one Digic5+ so the frame rate drops lower that the Rebel line, some kind of handicap will be there. Pick your poison...