You mean what mobile phones have done to cameras, gps navigators, handheld gaming, personal music players and other things that required dedicated devices in the past?
Those are not all exactly the same comparisions though. Sure a phone can perfectly replace a gps, the sound quality is already hard (if not impossible) to distinguish from dedicated players (usability: not so much though) and sure it's good at playing games. But there's just no phone, under the circumstances I often take pictures, which will yield pictures which are good enough or even close for me. And my dedicated…
Ok, but the vast majority of users are content with "good enough" pictures, so even if you are an outlier, it doesn't really matter. And sickbeard's right that that's exactly what happened with everything else that smartphones consumed in their march to rule the planet; they aren't the best at anything, but they do a little of everything and you always have them on you and it turns out that beats the hell out of something that does it better, but that you have to remember to bring all the time.