There will always be demand for DVC so long as rack rates continue to rise at astronomical rates, thus making a value proposition for the purchase of DVC. That's a separate argument (and the value proposition ain't what it used to be, but is still there).
DVC was always sold as deluxe for the price of moderate. We're (potentially) flirting with moderate for the price of deluxe, depending on how this thing shakes out (way too early to tell), and you're putting your head in the sand if you think that has no long-term ramifications to other owners or the future direction of DVC as a whole years down the line.
I really do hope that you are right: that we get a true deluxe resort, and if that's the case, we'll all be happy. I personally think this thing has a good chance at being a hybrid moderate/deluxe, which is a slippery slope. No doubt it will sell (all DVC's eventually do).