There will always be a market for real quality, particularly when it comes to small-volume specialty items like high-end knives. The issue is one of educating customers. Competing makers need to educate customers about how their products are superior beyond the damascus patterning and steel used.
We know that a knife is more than just the steel used, and that the skill, knowledge and effort applied by the knifemaker makes all the difference in terms of handling and performance - but that's not general knowledge out there yet. Damascus patterning and steel type for knives is like megapixels for digital cameras or horsepower for cars: it's an easily-understood but not necessarily meaningful "measure" for blank-slate or semi-knowledgeable customers to base their decisions on. The important thing is to communicate and educate about what else there is beyond that first-glance measure.
That education and communication won't be easy though. Many of us here have spent a lot of time to learn a lot of these things and we continue to teach one another what we learn. The challenge will be to communicate the key points to customers who are going to make their decision in a few minutes or a few days and don't have the interest to spend a lot of time to discuss and learn.
Whether the Remedy Damascus at 400 is dumping... I don't know about that. To me it's a whole different product, like a Miata is completely different from a Boxster. Both have four wheels, are similarly sized, are marketed as fun, zippy little cars, but I have zero interest in the Miata. Likewise, I have zero interest in this new knife. It's just a matter of perspective that comes with a bit of knowledge about the product and about my own preferences.
When my girlfriend was hunting for her own car for the first time, she didn't know the difference between any of the cars. To her, a car was a car was a car. I educated her over the course of a few test drive sessions with different models and now she truly understands the differences - and her preferences have changed with regards to what cars get her attention. The same can - and must - be done for knives, but in a more efficient fashion