My question is what effect do you think this will have on altcoins? In my view, this makes BitCoin more attractive. And secondly, does anyone believe this is a long-term change (the drop in price) or is this merely temporary?
Nothing. Some altcoins will continue to gain demand and lose demand in the market, the same as any speculative assets trading in any market.
Its temporary. As long as there is a limit in the block size, the fees will fluctuate as usage increases or decreases.