This looks to be a good development. In the past few years, the "scientific paper" publishers have been lax in their standards, publishing anything that they can get a couple of "peers" to review, and those peers seem to often be grad students looking to get their names on some papers to build a resume, but don't actually review or don't have sufficient background to provide proper review. Thus, we've had a rash of bogus papers published (if I remember correctly, there was even someone who did an expose where they produced "papers" with randomly selected passages from other sources and submitted them for publication, which the journals were all to eager to do).

On the contrary to this industry disappearing, my guess is that it will transform and several new electronically based formats will emerge. They will only be as good as their review process, but I'm betting that process will be much better handled (perhaps with quality ratings for the peer reviewers for example).