It could go either way: because Twitter are now eating their own dogfood (i.e. the Twitter API) perhaps that API will improve. Alternately they may instead be tempted to start creating internal-only APIs.

I think there is enough room for everyone, I agree with what Marco tweeted about it:

"I think the health of the Twitter-client market, for apps that all do pretty much the same things, shows that they'll all be fine."

http://twitter.com/marcoarment/status/11914060592

To put it succinctly: All of us are royally screwed.