Yep.
A lot of people who swore they would never give up on vinyl are walking around with their entire music library on an IPod.
Digital WILL replace paper and in the not so distant future.
And, assuming cloud based technology also evolves to keep up, the distinction between a PDF on an IPad and a DDI-type service may be very hard to identify.
While I doubt paper will "disappear", I do think there's a lot of people who say "there will always be X" as being somewhat myopic.
Lots of popular forms of entertainment expressions have either died or changed over time, as either technology or culture evolved. Here are some examples:
Vaudeville.
Medicine Shows
Minstrel Shows
Music Halls/Concert Saloons.
Jukeboxes
Tab Shows
Silent Film
It stands to reason that any form of entertainment is not immune to changes in civilization, technology, or culture.
That's why I think there will be major changes in the RPG as we know it over the next few decades, and in other forms of entertainment (newspapers are dying, and I have a feeling the regular comic strip as well as the traditional [Western] comic book will disappear in the next decade or two).