CD will not die, but it has a different future and a smaller place in the market. As a mainstream format for the sale of more disposable chart music it is as good as finished, with downloads and streaming quickly taking over. The decline of the big music chains sits hand in hand with this and I would be surprised if, going forward, music represents any more than about 25% of what HMV stock.
However, there are still people who wish to own the physical object, whether that be on CD, SACD, or vinyl and irrespective of whether they then play that music directly off the CD each time, or rip it in a lossless file format. In the classical world there is a huge number of big-box sets of great recordings at budget prices. Only the other day our recorded sound department at work took delivery of an 18-CD set of Gardiner conducting Mozart operas for less than £50, and there are countless other examples of this sort of packaging and promotion which will undoubtedly help to keep CD alive and well with collectors. Furthermore the SACD format still has currency in the classical world.
Outside of classical music, attitudes are often similar, especially in genres where there is strong loyalty to particular bands and styles. Beautifully presented editions of albums with strong bonus content keep the premium end of the market moving, whilst multi-disc sets packaging several albums of a particular band together make building a collection affordable. As an example of this, look at the two 5-CD sets EMI have released of Steeleye Span's Chrysalis label albums, or the new 5 disc set containing all the albums BJH recorded for the Harvest label.
CD doesn't have a huge mass-market, mainstream future. The rot set in there long ago and too many users have got used to downloading the latest track on their i-device. However, like vinyl, CD will always have a place and I predict it will live on for some time through independent outlets and clever packaging that offers quality and value for money.