I thought that point of photo frames (digital or not) was to display your photos, not to have an iPad sitting on the coffee table that has all of your photos on it ready to sift through. This is like saying that putting a photo album on your coffee table makes photos in frames obsolete.
Unless you're claiming that people will buy iPads with iPad-holsters and set them up on tables/shelves to constantly display a stream of their photos, then you haven't proved that the digital photo frame is "on it's way out."