Perhaps he is partially right
The burgeoning mid range DSLR compact is a useful extra for the professional but it puts DSLR technology in the hands of us mere mortals. My Olympus E-620 is superb for what I use it for.
I like it because it is more flexible than a compact and takes great pictures.
However, my daughter recently got a new mobile phone and I have to say that the pictures it takes are really rather good.
I can see the camera phone (and therefore compact camera) making roads into this area.
They will never replace the specialist camera but for most people, a good "snap" is good enough.