For example, the web browser, an archetypical internet tablet aplication is, was and will be a desktop replacement (the failure of WAP demonstrates this clearly) - sites are made for desktop style input, and that is keyboard + mouse (=stylus). While can dance around that with all sorts of zoom and predictive clicking game, the unaided human finger always will be only a surogate input device for it.
Canola settings are a personal example for me. It just drives me nuts - it's finger friendly to the point that I can't actually do what I want, with or without stylus. But with media players, at least you have choice. With a web browser, as mentioned above, you don't.
I didn't use such strong words, and don't think it would be the end of anything. I just think that ditching the stylus altogether is reducing functionality and limiting existing usage patterns for no particular reason other than saying 'look ma, no stylus !'. In this case, less is, well... less.
I seriously wish UI designers gave more thought to hybrid stylus/finger interfaces. But I'll go further - not only UI, but hardware designers, too. The device could detect whether the stylus is IN (=finger mode), or OUT (=mouse mode) and adapt both UI and display sensitivity/parameters accordingly.