Quite frankly, there was very little chance that litecoin dev agreed to change their algo (but hey the guy who proposed has been offered a position in dev team, that's certainly the only thing he wanted... this and getting some attention...) and to be honest I don't think it would be good for the coin in terms of image if they changed everything.
Also it is in the best interest of a coin to have the strongest network possible (especially as there was some fear of a 51% attack from a pool a week or two ago, obviously this could also comes from asics, but it also make easier to secure the network).

For gpu mining, it will just move to some other coins and some other algos which can also be profitable (assuming bitcoin survives next summer)