Does that mean those who started out with CPU mining are now out of it and only GPU miners can cope with the difficulity?
Seems so. But even a decent GPU won't help u much, u need a bunch of them.
Does anyone have a difficulty prediction for the next adjustment?
I'm guessing around 3,749 at the current network hashrate.
I notice the difficulty is still way up. If it does drop, what's to prevent someone from pointing an ASIC or server farm at BTE like last time and kicking the difficulty up again. Been around for a while and know some get a kick out of doing that kind of thing "just for fun".
I guess not much is stopping them

The hashrate has been quite unstable for a while, but recently it seems to be rising, which hopefully means that there will soon be enough full-time miners to prevent this type of thing having much effect on the network.