With many people trying to make plasmoids that do the work of full blown
applications is there the potential for Plasma to become a WM / DE in its
own right?
I doubt that this would be a good idea in real terms, particularly since KDE would
lose a great deal of momentum but the possibility of running plasma as DE on a net
book or such is interesting.

People will try as they think it's "cool" but ultimately it's just stupid and will be a massive waste of time and energy. It's fixing problem X's problem in the wrong place.