When the hashing power has decreased and rigs were sold. But yeah people are in denial, that's what gives scam artists alternate cryptocurrencies a free hand.
Deepbit disagrees with you. Over the past month the hash rate there (measured, not estimated) has gone from 5 terahash to 5.5 terahash. It was going up 50 gigahash a day as the price went below $10, and has since flatlined -- but it has not decreased in any measurable way.
*MY* remaining mining hardware is on craigslist, I don't deny it. Already sold two 5830s for $120 each, hoping for a difficulty drop or price pop to sell the last 2. But that won't be the general case until FPGA and ASIC miners make video cards as obsolete as CPUs.
Well deepbit seems to have a similar effect on people as the alternates have, mainly (seemingly) more predictable income. It's like the light version of the alternates. But if you look at the pool stats of solidcoin pools there are some people with serious hashing power on there. That's gonna result in quite a few bloody noses...
It obviously will not come overnight, there are people in special locations with fees of less than 0.1$/kwh who even might be able to continue but for the most people I don't see a way out. (Unless bitcoin suddenly gets a new stream of publicity pumping more money into the system)