I don't see it going away. Cheaper NEW lenses for the DX, cheaper cameras and enough people out there who will want them. The D7000 is an amazing camera and at the high end of the DX spectrum for Nikons. I also see the advantage of having at least one DX body when shooting telephoto. A 1.5 conversion factor (Nikon) makes a 200mm lens a 300mm lens and a 300mm lens a 450mm lens. You're getting more reach for the same price.
You can pick up DX format Nikon for a decent price and then a 70-210 off eBay for next to nothing and be good to go out to 305mm. Your average consumer (not pro-sumer, amateur or pro) won't want to pay upwards of $2000 for a camera and lens. I wrote a paper on Nikon DSLRs including their hierarchy. Nikon (and Canon) realize the need for budget priced DSLRs.