I wonder what will happen when difficulty goes way up and every one with less than 1 or 2 GHps will call it quits and drops out...
A couple of things:
1. Electricity & cooling costs will overtake the revenue generated. Those with cheaper costs will continue to mine. They will also be able to buy up cheap hardware from those with more expensive electricity, so the drawdown in profitability will be gradual. (hash rate lost by some will be gained by others). Overall it will take place pretty quickly.
2. Oscillation for a while, while people figure out if it is profitable or not to mine. Drop-off will decrease network hash rate, which will decrease difficulty, which will draw some back in. Some dweebs will even try to time these cycles, but only those who already have hardware and are borderline between profit and loss will do that.
3. Every time new hardware releases that improves on hashrate economics people will storm that and stuff that was borderline profitable will devalue and people will sell it off.
So I don't know. I wouldn't be surprised if there wasn't a dump of cheap 5830's, and it happened more gradually.
What's more surprising to me is that there is a market for bitcoins. I saw a post online today in the bitcoin marketplace where a guy wanted to buy a "very large amount" of bitcoins using silver and cash, and he wanted to meet in person to make the exchange. Shady. Pretty sure he wanted to buy illegal stuff with bitcoins, and wanted to keep his transfer private.