The interesting question is what will be the technology platform for web applications in say, 4 years time?
I see three competing platforms: (1) the XHTML based web, similar to that of today but extended by WHAT-WG, (2) Microsoft's Longhorn / Avalon / .NET platform, (3) the next generation W3C web, including SVG + SMIL + XForms + XHTML2 (You could also include the semantic web, but I doubt that is going to take off).
All of these platforms are likely to enjoy moderate success in different domains, I don't think one of them is going to "win" overall. So web applications may fragment the web, but is that necessarily a bad thing? Seems like an opportunity for a more vigorous marketplace of ideas, in which we may see some intriguing new developments.