On what do you base this? Larry is spending more on SPARC and Solaris than McNealy ever did! It's possible that Solaris will become less suited to (for example) HPC over time but for anything related to commercial data processing, including Java and web serving, expect for it to continue to occupy a leading position among the Unixes.
Oracle's strategy with Solaris is going to be to squeeze every last penny from it, and when it dies it dies. Killing OpenSolaris and making it clear that open source releases of the code base will be done only "at some point" after the commercial release are just the beginning of that.
They will push Solaris in the same places where they currently push Oracle DB. Those places tend to be of very little interest to 99% of the HN croud. Java and web serving are not the kinds of things that justify stratospherically overpriced software licenses...
As for SPARC, I seriously doubt they will pour significant money into it. Trying to compete with x86 is akin to setting $100 bills on fire at this point. They will no doubt keep the Sun brand alive and use it to sell x86 based machines (which is the strategy Sun itself started of course).
I believe they will. And they will also tailor it for Oracle DB and change the licensing plans to make SPARC a "wiser" choice, locking the customer both on SW and HW. The competition does it, so why shouldn't they do it also?
As far as I can figure out the only reason IBM has to keep developing POWER is their mainframe business, which is the king of platform lock-in :)
I don't see it "running into the ground" - people will be using it for many years in the future. However, the supply of people picking it for new projects probably just dried up quite a bit. People will 'grow up' knowing how to work with Linux, because that's what they tried at home, at school, what they learned on the job, and what their friends know. Those network effects mean that it'll mostly be sensible to keep switching to Linux over time, gradually, unless Solaris suddenly sprouts something that makes it a must-have, which I don't see.
Especially since it's easier to find people to work with it, more open, and not driven by a billionaire who wants you over a barrel.
Also, I think that Oracle is quickly putting paid to the sort of environment where innovations like dtrace happen, although I could be wrong.