Miguel de Icaza, creator of the Gnome Desktop, is a little down on the Linux Desktop. I cannot say I really disagree with his assessment. All the "great" desktop apps for Linux are really niche apps or apps that are cross platform. Chrome, Firefox, Thunderbird, even LibreOffice are all cross platform so their's nothing there that says Linux only. As a SysAdmin I would cry without ClusterSSH but that is really something for the SysAdmin niche. Adobe's PhotoShop works on Mac OS X and Windows but it is also a niche app (and rumor has it runs fine under Wine) that will be used by graphic designers, not Joe and Jane Smith.
As much as Miguel has a point it goes much broader than he realizes. It's not just Linux as Mac and Windows are going to hit the same problem for different reason. The 80% to 90% of computer users don't need the desktop. Killer apps or not their consumption habits are going to change and the PC will revert to niche areas. The killer app they do use (Internet and productivity software) are going mobile.
Get a good tablet with keyboard (bluetooth, usb, whatever) and suddenly the non-niche market has no need for the desktop. The PC of old will essentially be used by power users (gamers, programmers, developers, etc). Office apps will be in the "Cloud" or at least not needing a huge desktop to do the work. All the tablet needs is productivity software and the ability to connect to one to two larger displays and it will have wiped out the business PC as the productivity platform. All those office workers can start their spreadsheet or power point in a meeting and complete it at their desk on dual monitor goodness and not skip a beat. I have one Linux Admin in my office who has already said if he could get a ClusterSSH and a good shell client on his iPad he would have no need for a desktop.
Miguel's complaint about he Gnome/KDE and various windows manager's is frankly irrelevant to most people. If anything the Linux field needs to start thinking about next display technology and how it can jump in on the up and coming computer input technologies beyond the current multi touch. (Think of that computer desk from "The Island").
Apps come and go. They are what bring people to the computer platform but form factors also impact their usage. The power in a tablet computer is sufficient for the majority of people's needs. We are just waiting for the productivity apps to catch on and for the tablet designers to realize how the can supplant the desktop PC. Yes, niche players will always go for their desktop of choice but most of them will probably have a productivity device (Laptop/Tablet/Mobile device) on hand as well.
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