In general I agree with you, but that's actually a little bit of a chicken and egg paradox. I remember when Doom was a high-end game. If people keep making better games that demand better hardware, you'll be right. But if the games makers decide there's more money in finger fun for phones, (phinger phun phor phones?) then there will be little demand for better desktops, and the effort to develop them will fade.
You would still have a market of games unsuited to the current crop of mobile devices. You couldn’t run Battlefield, Crysis, Planetside, Assassin’s Creed III, or World of Warcraft on any of today’s tablet or smartphone offerings. There’s simply not enough to processing power.
The only thing I could see happening, if the extinction of the desktop is a certainty, is the birth of dedicated gaming platforms like the PS3, XBox, or Wii. The newest generations of these machines will be on par with the latest the market has to offer. It’s sad that enthusiasts like me will be left in the dustbin of history, but in the grand scheme of computing, this is not surprising. Those who don’t adapt, die.