I'm not sure what the long term effect will be, but I suspect profit switch pools will fragment. I don't think profit switch pools will get much larger, simply because there's a huge disadvantage for individual miners. Let's say there's a coin (ExampleCoin) with 200 Mh/s. And let's say the coin is the most profitable. If you're an individual miner, it might be really profitable switching to that coin, not solo mining but mining in an existing pool. Now the pool is hashing at like 201 Mh/s, and you have 1 Mh/s out of that. Not bad.

But if you join a profit switching pool, you'll be switched over with everyone else in your pool. Let's say your pool hashes at 2000 Mh/s. As soon the pool switches over to ExampleCoin, the coin's net hashrate is 2200 Mh/s, and you have a measly 1 Mh/s out of that.

The larger the profit switch pool the less of advantageous it becomes to join the pool. So hopefully this will be self regulating.

What I think might happen is:

1. We'll see a lot of new profit switching pools pop up.

2. There might be new variants of profit switching pools. An alternative to the current model where everyone in a profit switch switch pool mines the same coin would be to distribute the pool's mining power over several coins simultaneously. Then share profits get distributed as if the miners were mining an average of all the coins. One caveat is that miners can't be told what coin they're mining, or else it would be more profitable for the miners to individually mine the most profitable coin. Actually middlecoin might actually be doing this for all I know.

3. Eventually I think profit switching pools will be killed off by a profit switching client. If the mining client could automatically switch you between a bunch of coin-specific pools, that would be the most profitable from an individual miner perspective. The reason this isn't really done right now is because it's a pain to set up pool accounts for every coin.

All the pools are pretty flaky right now, either they go down a lot or they don't allow you to cash out. Also I think scryptpools has way more than 50% mining power, so the pool operator could easily do an attack.

If you're having problems with pools going down, one thing I found that works pretty well is to run multiple miner instances, each going to a different pool. That way if one pool is down and the miner can't connect, it'll automatically use as much as it can of your GPU for mining the pool that's still up.