With more and more efficient hardware you'll just get a higher number of hashes per second and an increased difficulty. At least someone else will reinvest that saved electricity into more hardware, so you have to do the same to compete.

Just imagine everyone using this more efficient hardware to save money on electricity, not increasing the mining difficulty. Eventually you'll have the risk of a single entity (e.g. a government organization) just buying enough hardware to have more than 50% of the hashing power, taking over the whole blockchain.