Is the diesel going to end up going the way of the dinosaur?

Torque has little to do with it. Gears or electric motors can produce torque. Diesel engines power big equipment because they have traditionally been more fuel efficient than gasoline engines. That is changing. The new 1.5 liter turbocharged Honda Civic is able to do 0-60 in 6.8 seconds and achieve 43 mpg. Even prior to the strict emission laws I'm not aware of a diesel that could attain that kind of performance and economy.