This. You might get one long block, that's all though. Difficulty adjusts and you're back to 10 minute average. The network functioned just fine when hashrate was much lower. Personally I'd like to see less institutional mining anyway, so I won't cry if big miners have to switch off because they're not making ends meet.
You would have long block times until the next adjustment. The two week interval could turn into 3 or 4 easily. After the next adjustment things would be back to normal.
You are quite right, I'd forgotten it was calculated fortnightly or so. Yeah, that would be a pain, but presumably not everyone would turn off their miners at once. Even those who found it uneconomical to mine would wait for varying lengths of time before they pulled the plug, in case the price came back up. I guess the really big outfits might switch off immediately if their costs are really high, but I think some of those keep a proportion of BTC anyway.