Is diffraction an increasing worry? Or, what's wrong with more megapixels?

Macx wrote:

I often read in these forums that we shouldn't get too many mega-pixels on the sensor, mainly because of diffraction and sometimes also because of other concerns like well depth etc.

I understand these concepts on a layman level, but I don't understand why people think that these issues grow in significance when you increase the amount of pixels on the sensor, and my reason is, that when we look at an image whether it's on print or on the screen, the resolution and magnification of those media is the important one when we determine if diffraction is significant.

For example, I'll shoot two identical photographs, but with two different sensors. Sensor A has a 16 mega-pixel sensor and sensor B has a 24 mega-pixel sensor. I shoot these photographs with an aperture where Sensor A isn't diffraction limited, but sensor B is. It is clear that if were to look at the photographs at "100%" and peep at individual pixels, sensor B would look fuzzy where sensor A is still sharp. However, when I look at the entire photographs in this example, I view it in print and from a distance where the image ends up with an effective resolution 16 "mega-pixels", (or in a display that has an even lower mega-pixel count) and because of that I cannot tell which was shot with sensor A or B when I look at the final image.

In conclusion, the interesting bit is the resolution you want from your output, and that is what limits how narrow apertures you can shoot with without having to worry about diffraction.

And in the case where the resolution you want from your output is higher than the resolution your sensor can provide, there is still no advantage to having a sensor with a lower resolution.

And that all means that we shouldn't worry too much about using f/11 or narrower if we don't plan to output it in a format where people will pixel peep. Nor should we worry about the future M43 models with ever increasing megapixels; as they will only increase the potential for resolution, never actually harm it.

...or does it? That's the question.