I'm not sure about this... I have no idea what percentage of non-gigging musicians have become software only, but is it really more than single digits?
I like my software instruments, but I use Omnisphere, Ethno, Z3TA, etc., to supplement my MOX, Jupiter, Virus, and Moog LP. At this point, I have a hard time imagining software completely replacing any or all of the hardware instruments I enjoy so much.
I think the plethora of great-sounding software instruments have forced the big hardware manufacturers to develop lower-priced hardware alternatives. Hence the Yamaha MOX and MX; Roland FA, Junos, and Gaia; Korg Krome, Kross, M50, etc.
And I agree the Korg has responded creatively and successfully with everything they've done. Especially with the new Odyssey announcement, you'll find a tremendous amount of Korg worshipping going on over at the much-trafficked Gearslutz forum.