I can't speak to whether or not BIAB will supplant Batch Sparging, but I don't see why not. There are guys who look at me sideways when I say I continuous sparge and have never batch sparged. But like many have said, I stuck with what first worked for me, and since I switched from extract to all grain in 1997, batch sparging wasn't even on my radar.
However, you might find it interesting that I do brew some batches BIAB. It came about when I was asked to teach a homebrewing class at one of our local community colleges. They let me write the class curriculum, and since we have tons of homebrew shops within a 30 mile radius that teach extract brewing, I wanted to do something different. Michael "Mufasa" Ferguson of BJ's fame has been known to suggest that potential brewers should skip extract all together and go right into all grain. I saw BIAB as a possible way to teach all grain brewing right off the bat while keeping equipment to a minimum. I brewed (on my own) in my first BIAB session a 5 gallon modified version of Mike McDole's "Janet's Brown", found it to be very similar to the 3-vessel continuous sparge version I like to keep on hand. The first class of seven students went through a 6 week class, where we were able to brew on week one and pop the caps on week 6. Some had never brewed before, some had brewed a few extract batches but was not happy with the results, one even had built a 3-vessel system but wanted to learn more about the process. But by starting with BIAB, I was able to skip sparging all together, and do everything in a single vessel, which made the instruction easier, and made it easy to see the scalability and simplicity of BIAB. In the end, the guy with the brew stand said he wished he'd taken the class first, one of the students planned to start with BIAB but expects he'll move to 3-vessel, one found BIAB perfect for her apartment, doing small batches on the stove, one plans to start with extract and specialty grains but doing full-volume boil (with a BIAB bag for the specialty grains) and one is not sure he'll ever brew, but said the class was one of the best he's ever had. The rest were planning to start with the method I demonstrated, a 10 gallon aluminum pot with a bag, a propane burner, and an immersion chiller.
What I tried to do in the class, however, was to not tout any method as being superior over the others, but to weigh the pros and cons in an open discussion and let them decide for themselves which way to go. I also tried to make sure they had plenty of other resources to consult, and to not just take my word for it.
And I guess the only other thing I would add to the conversation is my own observation: I don't know what it was like when the batch spargers were debating with the continuous spargers over whether it was a comparable technique - I wasn't on rec.craft.brewing or the Home Brew Digest much when that was going on - but if it was anything like the way some of the "BIAB/No-Chill/No-Mashout/20-minute-mash" advocates currently engage in the conversation - adversarial, argumentative, condescending - it's no wonder that even today there seems to be a divide where none need be.
Of course, I may be completely wrong.