I am sure the market will be smaller but I don't think it'll go away.

I would segment the "diamond ring" market into two: those who "feel obligated" to give/receive a diamond ring because of peer pressure, and those who genuinely find some meaning in the idea of an expensive engagement token.

Personally I thought I was in group 1 but turns out in my own life I am group two. So it never appealed to me to get a lab ring, and I know my wife would be put off by it. Meanwhile my best friend and his wife got the same size lab stone for somewhat cheaper and are happy with that. Group 1 and that's great.

So yes I agree with you the market will shrink because those who were never inherently interested in a high value stone will all go for lab - but perhaps the diminished supply of natural stones (this story) will keep the value of them higher for those who care.