MIDI will always be around. I agree with you - it will be in "software" since MIDI is the standard language all the instruments talk. I agree totally that hardware MIDI cables may be phased out in the future - due to the speed and the hassle. I'm not even sure how far things like mLAN will go. The money is keeping it an open standard. I guess because MIDI kicked off so well that it became the standard, Yamaha/Roland/etc are trying to market their new proprietary standards hoping it will become the next standard. Don't think that will happen.
Actually, I think USB is very promising - cheap and fast. Firewire also promising. Another great potential is ethernet (ie LAN). Already with software like FX Teleport, we can do away with all midi AND audio cables as all audio and midi signals are transmitted from PC to PC via one LAN cable . And with gigabit LAN, the speed is pretty impressive. That will also mean doing away with soundcards and midi interfaces - so less cost. Imagine in the future, we only need to connect via LAN cable - no audio and no midi cables. Everything is transmitted by just one cable. It's already happening and slowly catching on.