IMO we are there almost. I had every iphone until 14 pro and still use this today. I know what the top of the s curve feels like. From a pure model standpoint weighed against every day use cases for every day people (the right way to measure when comparing to something as ubiquitous as a phone), the models already have diminishing returns.

I think there is also the case were companies will simply use different tiers for different tasks.

While the engineering team might need a cutting edge model (with the associated costs), the marketing department will be fine by something that can grammar correct or turn a few bullet points into prose. Likewise you already don't need Fable for Ticket -> RAG -> Reply with Faq knowledge or escalate workflows

That's already the case with other very expensive software like CAD packages were oftentimes you have different feature sets enabled for different employees.