I think the classic will die when you can fit 256GB into an iPod Touch, either through flash memory or a thicker hard drive version. Otherwise the iPod Classic still sells to those that _HAVE_ to have 200+ GB of music with them at all times.
Apple will kill the Classic whenever it’s convenient. If there’s one small bump on the road to continuing to ship the Classic they just won’t anymore.
The only way I can see them getting growth out of the classic would be to put the massive memory to work hauling HD video around instead of music. That does suggest an interesting iOS device maybe aimed at high end camcorders if they can find a tiny 1 TB drive in the pipe somewhere.
I'm just saying Apple will know when the classic isn't worth the time/energy/shelf space and I wouldn't be shocked if they announced this is the case in weeks rather then years.
And I guess I'm making a wild guess as to how they might keep an HDD based idevice relevant although I don't think that's particularly likely either.
The Classic does not go beyond 160GB, you'd think (finally) having a 128GB touch would be sufficient to drop the Classic.