Then clearly the camera market is beyond saving, destined to be relegated to the prosumer and professional niche (a tiny fraction the size of the former market), and the smart companies will do what Sony has done and get into manufacturing mobile camera stacks for smartphones and tablets.
Smartphone cameras are already on par with or better than P&S cameras were when smartphones started supplanting them in the first place*, and they're only going to keep getting better. They'll obviously never match the much larger sensors on DSLRs, since they're still improving too, but the best smartphone cameras today (which will be the mainstream smartphone cameras of tomorrow) have already passed the point where nearly everybody doesn't care.
*: My last P&S camera, which cost as much as an entry-level DSLR, was a Canon S95. It's a 2010 camera that you can still buy today. It was enormously better than my 2009 smartphone, but it's now inferior to my 2014 smartphone camera in nearly every way. My smartphone has better low-light sensitivity due to big advancements in sensors (BSI was the big jump between 2009 and 2014) and ever growing smartphone sensor size (smartphone sensors are now almost as big as the S95's), and on-sensor phase detect means my smartphone focuses faster and better to boot. Not to mention my smartphone is much better at video, doing higher resolution at higher framerates for longer durations. About the only way the S95 is still better is form factor (and even then it took an after-market grip to get the S95 feeling really comfortable), but as you said, the best camera is the one you have with you, and my smartphone is always in my pocket, while any camera never would be. It'd be in a backpack at best, and why dig for a P&S in my backpack when the phone in my pocket takes better pictures?