"all" miners won't die off no matter what the difficulty is. If half the miners quit because difficulty is too high then the difficulty would fall 50%. The marginal miner, the one with below average efficiency (J/GH) and above average power cost are probably in a world of hurt though.
I can get 800 watts of power at 4 cents a k-watt. I can use a 600gh/800watt s-1 under volt & down clock setup. so 1.33 watts per hash but at 4 cents a k-watt
That will compete with a sponndoolies s30 using .5 watts (if it ever shows up) getting 11 cents a kwatt.
I am thinking people with spot setups will carry on my setup above will pay for power into feb/march of 2015
So you are right that all gear won't die off.
right now diff is growing faster then watt/hash is shrinking. some would argue this has pushed price up a bit from 425 usd to 525 usd.
there is some truth to what you say. what interests me is s-1s there are huge amounts of them maybe 35 % of the network .
with good down clock & under volt they stop making money at the 30-40 diff level. new gear is not much better.
a s-1 can do 1.25-1.33 watts at the plug>>>> set to 300 freq + undervolted
a s10 can do .7 watts at the plug>>>>> set to power save 1th mode.
the price of the s-10 does not make up for power saved. all this will become pretty obvious at 30-40 diff levels.
if the fiat price jumps to 800 or 1200 usd all will be good .
should be fun to watch it unfold.