While I'm in general agreeing with you, I must say your numbers/specs are still *way* off. X3/X4 Phenoms with 4Gb RAM and 500Gb was not *nearly* "low-end" five years ago. Vista was released five years ago. Requirements for that was 1GHz 32bit CPU, 1Gb RAM, 40Gb HDD and a 128Mb video card. "Low-end" was machines that did NOT meet those requirements (I was selling systems at that point. Sold many that didn't meet those). 4Gb RAM isn't "low-end" even NOW. (Or then we have entirely different meaning for "low-end".)
Also, "even the gamers will be looking at only swapping every 6 or 7 years" will probably never be true. 6 or 7 years is forever in computer terms and gamers (no matter how casual you are, if you classify yourself as a "gamer") WILL replace their systems far, FAR more frequently. Even I - that myself consider not being a high-end gamer and only replace my graphics card only once per 4-5 generations - replace my system far more frequently. Remember that last "4 generations" of graphics card was about 2-3 years (about). I just replaced my GTX285 few weeks ago and it was only a tad older than 2 years. My Q9650 CPU is pushing four years and it probably has less than a year life in it in my use. (I play quite a lot, but I don't necessarily play the newest games and play only for fun.) I have yet to meet a person that consider himself a "gamer" that DOESN'T replace their desktops once in 5 years. (At least parts of it.)
I'd agree that if one buys a top-end machine NOW, it will only "need" replacement in, perhaps, five years. But after 6-7? It won't be in "gamer-hands" anymore. Perhaps as a "backup" machine, or a machine that is capable of running most games/reduced settings that you've setup somewhere else (other room, summer house, neighbor's, etc..)
Now, "normal users".. THAT I agree 100%. Those girl-next-door, grannies and uncles, cousins and co-workers who do not play. They don't need to replace their machines until those literally don't start up anymore. I know people who use (daily) computers that came with XP (10 years ago) or even Win98. Heck, a friend of mine used a Mac LC II (that's about 20 years ago) up until 2011 (when the PSU died) as her work-computer (she writes).
I don't think "desktop" is going away anytime soon. Augmented, perhaps. Changed, probably. But gone? No. I'd believe the death of laptops sooner than desktops (tablets/other mobile devices are replacing laptops more than desktops).
It's quite simple, really, when you think about it. "The Desktop" will live exactly as long as companies are producing games for it. After that, it'll take a few declining years for it to fade out, but that's basically it. It is (and always have been) games - and thus companies who create games and gamers who play them - that make or break a success of any computing product.