Not the case any more.
There is absolutely no way plugins would devalue what Fractal do, aside from opening up to a way bigger market, it would funnel more HW sales too. Its happened time and time again where companies have resisted plugins for a long time, feeling that the risk is too big, only to realise afterwards that it pays off massively.
Do NDSP/Line 6/IK/Eventide/Strymon/Lexicon suffer from plugins existing? have all the plugin emulations of 1176’s, Neve’s, Pultec’s, Distressors, LA2A’s and everything else led to a decline in HW use? Literally the opposite thing happens, people try the plugins, and down the line some of those people buy HW too.
Would plugins stop all the touring bands who currently use Axe FX’s from using those live? are the sort of people who are pirating software people that are likely to spend $3000 on a HW modeller? These are people that would rather steal than open their own wallet, they are not people that should be taken THAT seriously.
Similarly, if the only reason I need to own an entire Axe FX is to “protect its value”, then I’m being scammed (at least a little bit). People said this kind of stuff for years with hardware reverbs, about HW was optimal and 480’s etc would never run on computers.