I think cel shading has a lot of potential. A lot of people got their back up against it initially because their first exposure to it was Wind Waker, whose problem wasn't cel shading but overall ass-ugly art direction.
But there are some games that use it very well, such as the popular Borderlands. One of the big benefits of cel-shading is that it can be used to effectively prop up a stylized, gorgeous world that doesn't require the processing power that a more realistic look would require.
Metal Gear AC!D 2 comes to mind; that game was on the PSP, but it was very pleasing to look at because its cel-shaded style gave the game a lot of visual flair without needing to tax the developer's resources trying to pack in more pixels and cut down on jaggies. The Dark Cloud series for the PS2 was very nice to look at, as well, and is probably my earliest real acquaintance with the technique. The characters and about half of the game was cel-shaded, but the world was generally in 3D. It made for a pretty striking, enjoyable visual style, and I really enjoyed it. Okami certainly benefitted immeasurably from complementing its focus on old Japanese calligraphy and painting with a world that is itself presented in such a style, and it managed to be beautiful, fun, and entirely unique.
I think as graphics improve, cel-shading and techniques like it will become more and more popular. Development of graphics tech is already well, well beyond the point of diminishing returns, and more and more money and hardware is used to less and less real effect every day. Once just looking realistic finally starts to become the status quo for any game, a much greater focus will need to be placed on art direction and style rather than pure power if a given title wants to stand out from the herd.
This won't necessarily mean cel-sahding, specifically, will be the go-to technique, but it certainly is a familiar and fairly proven option for giving a world a totally different, unique style without fruitlessly chasing the will-o-wisp of graphical photorealism.