You make good points. I don't think Ethereum will be #2 when it meets the masses. I think Bitcoin will fade this year to Ethereum. At the same time I see in 2019 and beyond being when Ethereum begins to fade as superior tech begins to hit stride.
But I don't see Ethereum losing it's place overnight just like Bitcoin didn't. It takes years and market cap isn't going to "dump" into something else, something new and experimental. People won't just leave Ethereum just because a better tech exists, it will require Ethereum has technical/political failures like Bitcoin is currently having.
In my opinion the goal shouldn't be to stop Ethereum or to care how much money people make in ETH. What matters is bringing crypto to the masses and expanding the ecosystem, and Ethereum is only one part of a potentially trillion dollar industry. There is enough space for every one of these projects to be in the tens or hundreds of billions.