I think you are probably correct in your thinking, but I have a feeling that there is yet another factor at play here: boredom.
There are just so many sites where photography is being flogged off, both as cheapish wall-art and also under the guise of fine art. Frankly, if you take enough time to look at enough sites (I do) the sheer quantity of product - which is all it is - is mind-bending. So much material and at so wide a range of prices must make anyone doubt the honesty of the marketplace. It is all devalued, exactly as has been the case with photographic stock.
There is no way I can see this change for the better, from the photographerīs point of view, and if anything, I fear that art sales in the photographic sector will end up as not a lot more than individuals kite flying, hoping against hope that somebody might buy something and make the cost of playing photographer that little bit more bearable.
Fashion also plays a part in forming opinion - is it even fashionable any more to hang large B/W pics on your loft wall? Who knows - I donīt have a loft!
There is also the fact that painting might have suffered a little from photographic print competition, but in the end, paintings still seem to be more legitimate as decoration; perhaps painting appeals more to the individual whereas photography to the boardroom? Some painters I know are still doing okay - Brooks Jensenīs fears need not be confined to digital competition alone!
The very rich are not like the rest of us; that is obvious and if you have known any of them well, you soon understand the factors that make them as they inevitably have to be (or perhaps the reverse is the case: being as they are is what made them wealthy). If you can indulge yourself with 25m-and-above yachts, third/fourth homes, car collections etc. then why would you really think much about a few photographic prints which might not even have the provenance claimed for them? Not only do photographs not travel all that well into traditional home decor, they have to fight for space with much more expensive competition. So yes, maybe the photo market is a lower one than painting, the few notable exceptions in the entertainment industry notwithstanding.
I do wish it were otherwise!