I don't think the long term prospects of Devcoin are very bright. The more people who write, the less pie there is for writers? That means it's a zero sum game. Why are people actually trying to attract more writers if the case is that quality will go down and so will the pay? It doesn't seem to be good for Devcoin either.
Long term the quality of articles of Devcoin will begin to reflect what writers are paid to write them.
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You may end up being correct. This is truly a unique experiment for a business plan. On the surface it's almost ideal but the big question is: can it be sustained and will quality improve or worsen as time goes on and shares shrink.
MarkM, made a good point that people won't rush out to just write anything cause the shares are large. At the same time you're correct too, one would expect quality to worsen as talented or educated people rather spend their time where they can maximize their earnings potential.
It remains to be seen. I'm excited to see what happens.