I agree with Tom. The advances in autofocus/motordrive/ ttl systems a few years ago had the most negative impact on professionals. But only slightly. It allowed a small number of people to bypass pros for specific small jobs.
Today, with all this new digital technology it seems to be more for a specific purpose. It allows amateurs to place their snapshots on the web, or print for friends or send to each other etc. It does not really affect professionals at all.
I will say that Photoshop/digital has allowed a new group of photographers to enter the realm, and that is women mainly, who photograph their children, and then branch off to become children's photographers. I think the ease of photoshop has given them an opportunity to enhance their work, doing it all inhouse, and starting a small business doing it. The beauty of this type of spontaneous work speaks for itself. Before photoshop, I doubt that they would have had the opportunity or the perhaps confidence to do this. Cheryl can probably address this better than I can.
Whether this has hurt existing professional studios is debatable.
I would like to point out that professional photography portrait studios have always held the belief that competition was good for business. Other photographers advertising would get the idea of family photographs into the minds of people and will increase your business as well. Snapshots, made people think, "I need to get a family portrait done".
The real "competition " is stereo/tv/furniture type places, car lots, that type of thing, that you competed with for the family's expendable income. They were the ones that hurt you.
The advent of photoshop did however hurt advertising photographers a few years ago, because it enabled companies to use images over and over by changing backgrounds, colors etc instead of employing the photographers again to create these new images.
But in most cases, as others have said, if you don't have the talent, gimmicky equipment will not help you.
Michael McBlane