I think this will just expand the pie. There's always been demand for <$1 chips and there is competition which is good for the consumer. I remember buying my first non-dice chips from sidepot as Paulson prices were too high. All hobbys need a entry level to ensure new recruits. China has filled that marketspace for years, if not decades.
We had Faux Clays (which is absurd that they just disappeared in a poof of smoke), china clays and now
Tina. I'm sure there were many in between. I think (?) I remember Sun-Fly for $0.49 at a period too(?). The quality (of entry level chips) do seem to increase and while we can huff and puff over
IPs being stomped left and right - it happens because there's a market demand for it.
Some of the "new recruits" will move up to more expensive chips, be it Sun-Fly, Chipco, Paulson, BRP/ABC,
BCC,
CPC, all of above and some will be happy with what they have/can afford. It's simple market and demand mechanics. The discussion should really be "Will demand exceed the (high end) market or vice versa"? How we get there is irrelevant, really.
If anything I think the (high end) demand will increase rather then decrease simply because of the quality issues with lower end chips. They function, but they don't give you a chubby (maybe that's just me though).