I'm not sure what people were expecting.
Even after this difficulty increase, annualized ROI of slapping a new video card in an old system and sticking it on deepnet is somewhere between 500 and 650%. Bitcoin has a very efficient and open exchange system. I'd be surprised if mining difficulty didn't increase at a rate of 50+% every two weeks until we're down to a more reasonable ROI, not adjusted for risk, of 10-30%. That's another 4-7 increases of 50+%, assuming bitcoin prices don't dramatically increase to compensate...in which case, it will last even longer.
How about after the next one, and the one after that, etc? Are you including the shortness of the retarget cycle into your projections?
I just picked up a bunch of capacity at the alarmingly good rate of 1.7 Mhash/sec per dollar. I don't expect to ever get that money back. I actually think that the magic day of no return was a couple of weeks ago.
Then again, if the exchange rate improves, which I find highly unlikely, new gear purchased today could still pay off. Maybe.
Here's my rationale, and note that I specifically was talking about putting a new video card in an old system:
1. The difficulty increase of 60%, by itself, does not mean hardware won't be profitable.
2. If we extrapolate this difficulty increase out indefinitely, however, it does.
3. Because of this, people are going to let off putting in new hardware, which will moderate the difficulty increases down to somewhere in the 20-40% range within a cycle or two.
4. At that point, we will have reached a 'reasonable' return for a risky venture in the area of 10-30% annually.
I misspoke saying that they would increase at 50%+ every two weeks for some time. I think it's more likely we'll see one, maybe two more increases at that rate, then slower, but significant increases for the foreseeable future thereafter. That's what it will take to get bitcoin mining profitability in line with ventures of comparable risk. However, this most recent difficulty increase should not have surprised anyone, given how much more coins cost now than they used to.