Guys, he really deserves a bit more credit than this. Programmable pixel, vertex and geometry processing are all part of a return to software rendering. It solved many of the limitations the developers of cutting-edge game engines were bumping into. So a big part of the predictions did come true, and you have to be quite a visionary for that.And remember kids the return of software only 3D solutions is only 5 years away, always
And it's not like we've reached the endpoint yet. Direct3D 10 and 11 offer nothing new compared to Direct3D 9. You can do exactly the same things, only more efficiently. To truely allow doing things the classic rasterization pipeline isn't capable of, we need to evolve even closer toward software rendering. Larrabee is just one year away...
Back when GPUs added ever more fixed-function abilities (e.g. texture coordinate generation and bump mapping), they quickly realized that it was pointless to spend ever more silicon on individual features. Many features were left unused most of the time. So the solution was to use generic arithmetic operations to perform the calculations in 'software'. Nowadays we're at the point where Direct3D keeps adding ever more 3D pipeline stages, with many of them frequently left unused, but they still have an overhead in the hardware and the drivers. The solution is again to add more programmability. It allows to implement the current API pipeline more efficiently, but also to unleash many new abilities by giving more control to developers.
The first pixel shader model was hardly anything more than a language describing which texture stages to enable, and what operations they should perform. We're close to that point with the API's pipeline. Typically you'll still call certain API functions to enable or disable stages and tell them how to operate, but much of that can already be described in a type of scripting language that desribes what each stage does. Here's a glimpse at the first generation of truely programmable graphics pipelines: GRAMPS.
Personally I don't think the GPU will dissapear, and neither will APIs. But they'll be redefined in a way that we no longer recognise today's GPUs and APIs as the same thing. They already underwent a serious transformation with the move from fixed-function to shaders. And in this sense Sweeney was right all along.