It's a concern of ours (the jQuery Project) as well. We've been actively working on mobile over the last couple months (mostly getting jQuery core in a better state with regards to supporting more mobile platforms). We see one major gap in the market though: The lack of any sort of UI framework tailored towards cross-browser mobile development (frameworks like jQTouch and iUI both primarily target the iPhone and replicate an iPhone-like experience). Having jQuery core capable of supporting all major mobile platforms will make it much easier to develop a mobile UI framework specifically tailored to the smaller screen sizes.

Either way, jQTouch is an incredibly popular jQuery plugin - and since it's MIT licensed - we'll do everything we can to make sure that a copy that runs on jQuery will exist in the long term (either by providing an alternative set of tools or by making sure that a jQuery-using version of jQTouch has a good, well-maintained, home).

it won't switch to ExtJS unless it gets trimmed down to like 40kb. It won't. I think this is just a diversification for ExtJS since other frameworks are doing UI components now (jQuery UI will catch up to it soon)