Although Primecoin follows inflationary concept, it produces not so much coins per year. 1 minute block target results in 525600 blocks per year. If the 1st year average difficulty is 11, the coin supply is 4.4 million only. By the way, it has been 40 days after the release and 1.6 million coins been mined already. Nothing wrong there.
Primecoin cannot be 51% attacked easily. It employs advanced checkpointing just like PPCoin, though it's disabled by default currently. May become mandatory at any moment with a simple client update if necessary.
If Avalon didn't sell its mining rigs and chips to the public but instead got private venture capital and mined coins for Avalon itself, it would have easily been able to take over Bitcoin and all sha256 based cryptocurrecnies by sheer dominant hashing power.
Avalon didn't do it because, by pure luck, its founder happens to have the decentralization ideal. Avalon's 110nm technology is nothing cutting edge. I don't see why can't anyone fund a way cooler, hence more powerful, 40nm ASIC miner in a period of 6-12 months. BTC is a legal currency now. It's a viable business. If the new miners are 3 times more powerful than all Avalons, it can take over ~70% of the hashing power. The dominant role of BTC sure makes it a lightning rod to attract attackers.
KnC ASICs are at 28nm already. Current Avalons and Erupters are becoming obsolete.