We all know that there is a reason ASICs have always been used for TCP/IP processing and not x86 procs. Up until about a year ago that fact still held true. That was until Intel developed a cool little piece of code called DPDK. Seriously, look into it if you want to know why x86 might actually be OK for simple L3/4 IP/TCP tasks such as routing/firewall/vpn etc. I know that today you can push 40gbps line speed L3 operations on COTS hardware on a single proc (8 cores) in a server. To buy a router today that can do the same will cost you around $25 - $30k. Switching operations that still require low latency and high port density will still need to be done on dedicated switches, but anything requiring brute horsepower for L3 forwarding at high throughput (not the same as latency) will be able to be done in virtual appliances now.
While we are still a few years away from mass market enterprise virtual router/firewall parity to hardware, we will make it there. The is a boatload of money to be made any time there is a huge market disruption. There are only three companies that don't want this kind of disruption, namely Cisco, Juniper, and Huawei. Every other networking vendor is watering at the mouth at the very thought that they could steal money and market share from those three. There are huge amounts of money and talent working on this (Intel, VMWare, Red Hat, HP, Brocade, and many more). I know for a fact that Intel is going to invest massively in networking over the next few years. Sit tight and watch John Chambers writhe in his comfy leather chair. It's gonna be fun watching that company go the way of Blackberry.