If PC gaming died, video card innovation would probably die, but the gaming world is not driving the PC world, there are other driving forces behind the need for faster PCs, most of them related to business. I know my P41.5GHz at work isn't fast enough for me...it can't keep up with everything I'm trying to do. My Dual PIII450 rig is getting a bit sluggish too. And these are workstations, nevermind the burdens that some servers are put under, and applications are still getting bigger and more processor intensive.
I'm writing a program that can read lips and do traditional voice recognition simultaneously to improve accuracy, and let me tell you, that takes a lot of processing power on a PC. Faster PCs allow for more innovation, which ends up requiring even faster PCs, and around we go again. Eventually computers will be fast to the point where it no longer makes sense to do much more to improve their speeds, but that's a long way off.