Oh, I'm aware of how he was caught, but the fact he apparently had dealings with several undercover police officers and federal agents in his time running the Silk Road demonstrates that these organisations are relatively easy for law enforcement to penetrate. The same has been true of various freelancers and security experts with connections to law enforcement, like the aforementioned Brian Krebs. He and other security researchers have had an active presence inside numerous criminal forums- in fact, in his blog he frequently reveals the findings of his interaction with DDoSers, carders, people involved in the Silk Road, botnets, financial fraud, identity theft, phishing and all sorts of other criminal pastimes. Some of these communities are much harder to infiltrate than the sites accessible by Tor, solely based on the fact they're invitation-only.
I've got every confidence that large numbers of small-time sellers are going to be moving on to other sites, as will buyers, but this fundamentally demonstrates the near-impossibility of separating virtual from real if you're going to do something that involves a physical medium. No matter how competent the big-time sellers are in regard to their security, there are still going to be weak points, and if these were enough to catch out the ringleader of probably the largest illicit goods marketplace in the US, then I think it's reasonable to assume that many people are going to start questioning just how secure operating in a sphere which is coming under more and more scrutiny from law enforcement actually is. The Tor implementation has been compromised once already, effectively causing users to be identifiable. The same will happen again sooner or later, and in fact probably already has- we just don't know about it yet.