In general I see tablets taking off, but more at the expense of laptops than desktops as such, but that's accepting that a lot of users are already moving from desktops already to portable devices like laptops.
The problem does come still with capabilities, the cheap tablets will still be ARM based and not really capable of fully replacing a laptop/pc, whilst the tablets that can replace a laptop/pc do so at a large cost (£1000+ for the pro tablet? that's not going to sell well compared to a £300 laptop to an average home user...), as well as taking away some of the plus points of tablets such as battery life and portability
I reckon we'll see a general case of most people owning a desktop or laptop and a smartphone and probably a tablet as well, covering all bases, I think it will be a very long time until we see the majority of people with just a tablet and smartphone...
You can hook up an xbox or ps3 controller to a phone or tablet with little effort. Same with a mouse. I didn't say the exact same games would necessarily be on mobile platforms (though many will undoubtedly be), but games will certainly start to rival console quality.
And like I linked to earlier, cloud gaming will in the future let you play top games on almost any hardware.
The graphical power of mobile chips is nowhere near that of desktop chips, not even of several years ago, and yes they are making decent improvements but that's from a very low level, you'd be talking a 100x improvement or more from the best mobile chips to equal a current graphics card and that simply isn't going to happen anytime soon.
They do some ok games due to the low res being used, but (true) 1080p which is what will be the standard for the next-gen consoles along with the same quality of graphics as consoles just isn't going to happen.
And then there's cost, yes they're cheaper currently and that is, at least in part, a reason for the large number of downloads/installs but how much of that cheapness is due to them being very simple/small games, not produced to the same quality and scale as modern console/pc games? Will people pay £30 per game for tablet gaming? not likely...
And cloud gaming, anybody seriously still thinks this can work? FPS and Racing games are both fairly large genre's and both require latency beyond which cloud gaming can ever provide, it might work for some of the niche genre's like RTS games but that's not going to provide much of an income compared to FPS