I don't think games will become entirely be single player or multiplayer, some games just bang multiplayer in even it's mediocre to maximize sales. I think it's a problem most AAA games have, with the production cost, hype machines and what not, a game can't just be 100 thousand people, it must be designed for the largest audience possible.
With games like Call Of Duty 4 and Halo I think they would be better doing what ID done with Quake 3, drop the single player and completely build a game ground up specifically built for multiplayer, while the single player is decent, from what I am aware most people play these for the multiplayer.
When it comes to attempting to make an entirely co-op focused game I think Resident Evil 5 and Left4dead highlight the problems that arise with trying to make a multiplayer focused game with single player type of narrative and design. I think in order for co-op to work, certain elements need to be taken out of completely changed. Capcom didn't seem to make any concessions for single and cooperative multiplayer, because of this Resident Evil 5 suffers heavily.
Resident Evil 5 uses cut scenes as a primarily means of story telling, these cut scenes are not only for main plot points but also to alert the player of even minor things, such as enemy's entering the area. While the cut scenes are very polished, after the initial play through they become excruciatingly annoying. Further more both players must agree to skip them, otherwise it is forced. Valve attempted cut scenes in Left4dead but decided to take them out due to redundancy as well eating up actual game play time, this is good game design.
Poorly conceived game play decisions also hamper the game such as quick time events that rely on both players. In nearly all cases these happen sporadically and without warning, if the other player is having problems, this can become a frustrating experience. The on the rail gameplay segments also fall flat, while they are enjoyable on the first play-through the immediately become redundant on further play-through. Like many single player games the boss battles have a single and fairly simple method of over-coming the enemy, after figuring out or being told via mulitplayer, there is no challenge what so ever, this is best suited for single player gaming.
Resident Evil 5 can take around 7-8 hours to play through, Left4dead being around 4-5 on the first. Resident Evil 5 is one continuous game with chapters, there is no crescendo from playing through segments, instead, to reach a satisfying conclusion, the player must entirely finish the game, that means you are a human team mate will be sitting for 7-8 hours, which is far too much, even on a first play through for most people, especially with forced cut scenes. Valve chopped campaign up into different, smaller 1-2 hour segments, each with a beginning, middle and end allowing the player to have a satisfying conclusions to there playing time.
While it's possible for games entirely built on a co-op experience than being a separate component, I don't think you can't design it with a single player mentality, it's detrimental.
I think next generation consoles will become saturated MMO's, they are growing at the moment but they haven't had there World Of Warcraft or Halo type game that sets the boom, many people will complain.