I suppose there are two main areas where the RaspberryPi is used: Embedded device and computer replacement.
For the embedded device case, what may have been an Arduino project pre-RaspberryPI became a, say, Python project running on a full Linux system. For this use-case, microcontrollers have gotten much more approachable and many development-grade embedded Linux boards have come out built to the standard of the Raspberry Pi and it’s ease of use.
For the computer replacement, I’m talking about the random media center boxes, tv-as-monitor, network server, or just low power box to use as a desktop. We have the new nucs and knock off or similar boxes because all they did was take a netbook without a screen and keyboard, slice up the main board so it fits in a square, and break out all the I/O ports. These things that can be had for $100-$400 are respectable, low-workload computers.
Has the Pi bubble burst? As long as these ostensibly brain-dead industrial control systems companies keep gobbling up the supply of them, yes. Has the embedded and small-computer bubble burst? Absolutely not.