Yes the alt-coins certainly dilute the mining base but do they not also dilute the price of the useful coins? For most of this year I have mined other coins, and have profited nicely from them, but now it seems almost pointless because of the rate at which new ones are being released. If you don't get in on the correct new coin within the first few hours you'll end up not profiting anymore than if you had mined one of the major coins.