I don't think flight simulators in general will have a problem just because MS is doing erratic things.
At this point in time there's a good coverage of almost all categories and it's expanding. There's RoF for WWI, IL2 for WWII, DCS for the modern stuff and also MSFS and Xplane for civilian flying. RoF is still young, IL2 is old but it's still getting upgraded, SoW is closer every day, DCS is only on its second installment and Xplane will be getting a new version. Also, let's not forget the upcoming Jet Thunder sim about the falklands war.
As for how good or bad FSX is, the general consensus among civilian virtual pilots is that FSX is a somewhat poorly optimized resource hog and its default flight modelling is a bit funky at times but it allows for better graphics, while Xplane has the best flight modelling but uses too much of repeating/generic graphics for the ground.
However, some of the add-ons for FSX are very realistic because the developers can use FSX only as a "hub" and thanks to its simconnect interface they can "plug in" improved modules of their own that considerably improve what's lacking in the default aircraft. I can attest to that after having spent quite some time flying 3rd party payware aircraft on a friend's PC. So it would be more accurate to say that default FSX is lacking in FM but has a lot of "hooks" built into its engine if people want to improve things on their own.
In the future i think that Xplane 10 will probably take the lead for civilian sims. The graphics on aircraft are already similar in quality between Xplane and FSX, but for Xplane10 they are also working on a new and imrpoved method to bridge the one gap where FSX is superior: the environment graphics (terrain and sky). The fact that it's going to be a fresh, imrpoved engine coupled with the fact that FSX support will be declining as time goes by is also another advantage for Xplane10.
In any case, even stock FSX with all its drawbacks can give you a more detailed idea of how an aircraft really operates and how simplified some things have been in most combat flight simulators. Thankfully, a lot of that extra features usually found in civilian sims are going to be included in SoW as well and they will most probably be done to a higher degree of realism and better optimized too. It was Oleg Maddox who said some time ago that there are 300 to 500 different parameters being monitored by the SoW engine for each individual aircraft.
So, it looks like we are getting enough titles. None is perfect and they have to focus on a specific part of modelling the experience of flight, but as technology goes forward and each series evolves it looks like they are all incorporating features from each other to form a more complete simulated picture.
In the end, flight sims might be an expensive developing process for a low pool of potential sales but their advantage is that they have a very stable and supportive customer base, so it's "less money but more or less a guaranteed audience size" instead of "potential for massive sales that might or might not happen".
I think that after years of neglect where a select few held the torch for the genre, we are going through a period of a mild resurgence of the hobby.
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