I think that the underwhelming sales of DJ Hero, combined with the terrible reception of Tony Hawk Ride will be enough to break Activision's peripheral addiction. The reason why more games didn't use peripherals until now is because it's difficult to make a profit off of them. They cost a lot of money to design, test, fix, and distribute, and if the game they use isn't a hit then there's not much hope of selling a lot, which means all of the R&D money goes down the drain.
With DJ Hero, there is a possibility that Activision will recoup their losses from it with a sequel, but it was not the quick and easy buck that Activision was expecting it would be. With THR, Activision has pretty much hit a wall right out of the gate with it. People complain that the controller doesn't work right and that the game itself is ass, and on top of that as far as I can tell no-one is buying it. It was a big investment for Activision that they made because they thought it was a sure thing, but it ended up biting them in the butt. For all that R & D they have a game design that people hate, and a controller that they complain does not work well enough to build a game around. Customers aren't going to drop $120 on a crappy game, especially the long term investment is highly questionable.
To quote Jeff Gerstmann in his review:
"While the Tony Hawk franchise has been down on its luck lately, and was probably in need of a reboot as dramatic as this, the execution is such a miserable failure that it manages to splash even more mud on Tony Hawk's legacy. I'm left with a firm belief that whichever side of the Tony Hawk/Activision partnership has the out clause in the contract should just exercise it and part ways for good. Enough is enough."