* Uber will wipe-out taxi business while being more expensive * Uber will always be more expensive than taxis
Neither is true so conclusion cannot be true either.
If Uber is more expensive than taxis and there's demand for a cheaper alternative, there will still be demand for taxis. Maybe less than today, but as long as demand is there, the taxis will be there.
But this point is moot, because Uber (or someone else) has a chance to be cheaper. UberX is already cheaper than Uber and they just announced up to 25% fare reductions on UberX in SF, to compete with Lyft and SideCar, which, I believe, are already cheaper than taxis.
What is in the interest of everybody (rich, poor, young, elderly) is more competition. Uber is competing with taxis, hopefully forcing them to improve their service. Lyft and SideCar are competing mostly on price.
The only losers from this competition are existing taxi companies, and that's exactly how it's supposed to work: people benefit when new entrants provide better service or the same service at a cheaper price.