Eventually, if there's enough shovelware, it'll start to erode consumer confidence in gaming.
No, it'll start eroding the confidence in the marketplaces. Which just means that the market transitions to a more curated model, not that the market itself will go away completely.
Also, I really do not buy the argument that a big failure in the mobile F2P space will have an appreciable effect on the other forms of video gaming.
Nah, I don't mean the whole industry - console and PC gamers are too entrenched to care about what happens to mobile gaming, but I meant the mobile industry. Sorry, I should have specified! I think the demographics of mobile and mainstream gaming are so different they might as well be separate from each other.
The current business model is definitely heading for destruction. You're probably right in that a new business model will take its place, but whether or not it remains successful is kind of a crapshoot. The last time it happened, Nintendo came along at the right time with the right ideas and resurrected it, but if mobile gaming doesn't have a company like that that will get the timing right, who knows what'll happen to it?