Everything in this post is my best guess. Nothing more, nothing less.
Is the foreseeable future of the RPG market crowded?
In terms of raw numbers of products and publishers, yes. However, what we actually have are WotC and Paizo jockeying for the position of top dog (and, in RPG terms, about neck and neck)... and the rest. Even adding everyone else together, they're still smaller than either of the big two.
Five years down the line, my expectation is that the position will look much the same (unless Paizo implode). The names of the other three members of the "top five" list will change, bit will remain the case that "the owners of D&D", Paizo, and three other companies will make up that list.
With all these kickstarters and hope for new editions of games, how do the waters look?
Kickstarter is a fad, like the dot-com bubble and the OGL glut. Over the next 18 months, we're going to see a
lot of projects (that reached their funding targets) fail to actually deliver what was promised - probably 50% or more will simply fail.
Once that happens, the bottom will drop out of the fad, and publishers will no longer have people lining up to throw money at any and all projects they dream up.
Kickstarter won't go away, but it will cease to be a sure thing. Instead, people will become much more choosy on who to back. The offerings that meet their target will either be people with proven track records of success (such as Monte Cook or Reaper); projects that are mostly 'done' but need funding for some specific, and well defined, addition (with the promise that
something will come out regardless); or, most often, both.
In the specific case of RPGs, things will look much as they do now, but smaller. Yet more FLGS will have closed, and we're likely to have fewer 'big' companies. But there will still be a steady stream of small companies putting stuff out, there will still be games being produced, and the community may well be as vibrant as ever.
As far as I can see, the big unknown surrounds D&D. 5e might be a runaway success. More likely, I think it may well be a moderate success, fail to meet Hasbro's expectations, and so be cancelled. The question then is whether they just put it in the vault, or whether they license it out to another company.
As I said, everything in this post is just my best guess. Make of it what you will.