I agree very much with the technical assessment of this, though I think it the mitigating factor for the winners and losers won't be features, rather loyalty.

Portals and ISP's are like banks. The perceived pain of changing (new contracts, new navigation to learn, new looks) is too high for people to be bothered. And, we've seen both parties engage in escalating tit-for-tat tactics (MSN vs. Yahoo messenger vs. AOL messanger).

The bottom line is, it's quicker and easier to implement new technology and services that to create a loyal install base.

So, whilst I think all these things will come about, I don't think you'll see a collapse of the likes of AOL. Rather, it will be a lingering, painful death with a few spasms that will upset the market on the way down