Yeah, 5" devices are a nice size and make people somewhat less likely to reach for their tablet when reading. But is a 5" screen going to replace a textbook? or a magazine? or a kiosk? are people going to want to watch a movie on their phone?
It's all of the above - phones, tablets, laptops. Depends on what you are doing.
But fact is, many are now using tablets instead of laptops. Tablets are simply a more pleasant experience for causal use. And a lot of computer use is casual - reading, surfing the web, games, email, facebook.
So IMO tablets trend up in the long term, laptops trend down. But neither die.