The PC market (where P = personal and 'PC' includes Mac,Windows,Linux etc.) has had a 30 year honeymoon period during which specifications were increasing exponentially and real-time prices were dropping. Customers had a real incentive to upgrade their hardware and software every 18 months or so, because they were trying to to jobs that were pushing at the limits of their hardware.
Now, that has come to an end. Your 3-year old PC can effortlessly run a GUI-based OS like Windows 7, OS X 10.6 or your Linux distro of choice. It can do non-linear HD video editing fast enough for 'pro-sumers'. It can render web pages as fast as your broadband can deliver them. It can play FPS video games at 60 frames/sec, at levels of detail that are just this side of 'uncanny valley'. The only reason it would even break a sweat doing wordprocessing, DTP or spreadsheets is if the software is a bloated mess mentioning no names). The 4GB-8GB RAM you got is probably still enough and the only thing that can really fill up a 500G+ HDD for personal use is your video pr0n collection - for which cheap external HDs (convenient to lock in a cupboard) are available.
Of course, there are still specialist niches who need Moore's Law to keep rolling - but they will increasingly be looking at things like multi-GPU computing, clusters and the Cloud (£1 in the swear jar) rather than traditional Personal Computers.
Upgrading might get you a 10% improvement, but that's not going to turn your movie render from "coffee break" to "instant". I think the last, great upgrade for most people will be to switch from spinning rust to SSD (which does produce a dramatic speed up for many users) - after that, the only reason to upgrade will be if your computer breaks, suffers planned obsolescence or if the vendor sells you a stylish new model on non-technical grounds (Apple are the only real masters of that - possibly why they are doing less badly than others).
Sure, tablets and smartphones are part of the picture, but I suspect that it is more a case of people spending their spare cash on the latest fondleslab as a supplement to their 2 year-old PC rather than junking PCs for tablets.
There's also a case of self-fulfilling prophecy, with manufacturers obviously spending their R&D money on mobile devices rather than coming up with anything new in the PC line (beyond bunging touch-screens on their laptops) and software houses screwing up their offerings in a misguided attempt to make them more tablet-like (Windows 8, Gnome 3, Unity).
The only reason the PC will die is if modern hypercapitalist corporations decied that they can't be arsed to support a mature market that is no longer in its boom years and unlikely to generate short term windfall profits.
Quite frankly, computing could do with a few years respite from 'if it works it is obsolete' to give people a chance to finish upgrading their DOS software to a system that may still be around when they finish the job.