Hello,
I'll try to bring this discussion back to the furure of digital phorography per se, instead of the future of technology in general.
The original question, as restated, was: has the image quality plateaued.
In my mind we could be really close to a quality plateau if your only 2 outputs are small size prints or high res screens. Heck; even a 1080i tv can only display 2megapixels at a time!
But if you want to think ahead a few years, imagine displays a lot bigger and a lot denser than 1080i and think of printing 24X36 and bigger. Those tv screens and monitors are coming, no doubt. And as cost will go down, those bigger prints will become more and more popular.
Only that wouldn't make much of a difference. But think ahead a bit more and you'll find a lot of other sources for improvement in image quality.
Adobe already has a working prototype of a 3D photographic camera. It takes only 1 image, from 1 point of view. But you can play around with the focus location and depth. This is going to transform how we think about image quality, and it's not going to come in the form of a firmware update...
Imagine a sensor on which the individual pixels can determine their own optimal ISO and "speed" to capture the most imformation. So no more noisy dark spots in otherwise well exposed images, no more blown highlights, no more cranking up the ISO at the cost of noise... This will force us to think of dynamic range in a very different way.
Imagine a lens made up of a series of flexible lenses that can automatically find the optimal configuration for best light transmission and transformation. Zoom lenses without a single compromise. Can we even label such a lens using the traditionnal symbols? How will that affect image quality?
Our imaginations are just not up to the task... There will be a LOT more revolutionary things coming to the world of photography, and only one thing's sure: image quality will never plateau...
Loa
P.S. We're really bad at predicting the future. I mean: really really bad. In 1984, Ray Kurzweil got laughed at (by Kasparov) by suggesting that in 1998 a computer would beat the world's best chess player. Again in 1993 he got laughed at by Kasparov again for the same exact suggestion. That grand champion got beaten in 1997. Now just about ANY computer will beat 99.99% of the world's population at chess. Chess was regarded, up until the turn of the century, as the game of Kings. Now, we just don't say that anymore...
P.P.S. If you want a funny (with a few insightful moments) account of what famous photographers thought would happen in 2150, go here:
Shutterbug: Future Of Photography
Some of the suggestions made about 10 years ago, for 2150, are already "old news"!