Yes, that’s a possibility! And for app types that have a limited ceiling of how much value they can provide, that will definitely be a thing as an AI app can saturate all of that value.
But for apps that have a lot of ceiling, people will still gravitate to apps that have had more care and attention than someone vibe coding it once and throwing it on the store, just like how people choose those well-built and maintained apps today over using their built-in Reminders app.