I think that danger is very real. I used to be a Flickr Pro member but I've been taking fewer pictures the last few years (for several reasons) and can't justify the Pro account anymore. However, the side affect of that is that now some of my older pictures are less accessible and my old photo sets aren't browseable. At least to me this seems like a bad business plan for Flickr, especially amidst an abundance of rabid competition.

Could you point me to some of the rabid competition that might offer a similar pricing model?

Flickr's main competition isn't with services that have feature parity with them, it's more with the growing list of free image sharing sites. Imgur, twitpic, facebook, picassa web, even dropbox. Flickr's value add is rapidly becoming smaller and smaller, which could very easily undermine their business model.

Exactly. I used to have a flickr account but since dropbox/facebook came along if I want to share anything it goes in dropbox (public) or facebook (public, but it's easy for my family to see the pics).