Therefore, since cameras are finite, how could canon improve the 5DIII without damaging the 1DS series ? Only by merging 1DS with 1D with a price a bit above the 1DIV. They can't force the current 1D pro users to pay much higher prices. It is a possibility that the new merged 1D to be an FF high res camera with 5fps, with 1.3 crop ability reaching 10fps? With this, canon can give the 5DIII a 7D AF without a problem, since it will still be a 4fps camera, without special functionality and durability of the 1D, and the price difference with the new 1D is smaller too. The more we get near the limit of what we need, the more the prices will drop. The 60D is an example, and I feel the new 1Ds/1D will be next. I have doubts about the pricing of the 5DIII.
This is just what I am predicting, but I am 100% sure that I will get the 5DIII
You think too much like a Canon executive, and to little like a Canon customer.
After all, Nikon has the D700, which (with battery grip) came pretty close to Nikon's top model at the time of its appearance -- same AF system as D3, very high fps with grip (8fps, 5fps without), same resolution. And it seems Nikon was still selling D3(s) at that time.
I feel that a 5D Mk.III (although I think it might end up being the infamous "3D", see below) should compete with a D700 (or rather its successor), i.e., should offer an improved AF and higher FPS. At the same price point as the D700(or successor) I am willing trade some of the D700 extra fps and some of its 50+ AF points for the higher res of the 5D Mk.II. So they should make it 24+MP, give it the 7D AF and spec it at ~6fps (if it were 8fps I wouldn't mind, though
And about damaging the 1Ds series: the 1Ds Mk.III is begging for a replacement, so while a 5D Mk.III as I sketched it above would of course overshadow the current Mk.III in many aspects, the overdue 1Ds Mk.IV will restore order in Canon's camera line up.
This camera will definitely be a tad more expensive than the current 5D MkII (yes, despite Nikon having the D700 at a price below the 5D Mk.II, which beats the 5D Mk.II in every regard except resolution, canon will try to continue with their customer rip off).
However, with that spec, there would be space for for a 5DMk.IIn (essentially the current one, perhaps the same sensor as the camera I sketched above), but lower fps, simpler AF, but adding some of the gimmicks of the day (in particular a 3:2 screen and the movie switch from the 7D).
This camera could then continue occupying the price point of the current 5DMk.II or D700.