It was inevitable. It’s now official. This morning’s USA Today confirmed that Kodak is discontinuing Kodachrome:
Eastman Kodak said Monday it’s retiring its most senior film because of declining customer demand in an increasingly digital age.
The world’s first commercially successful color film, immortalized in song by Simon, spent 74 years in Kodak’s portfolio. It enjoyed its heyday in the 1950s and ’60s, but in recent years has nudged closer to obscurity: Sales of Kodachrome are now just a fraction of 1% of the company’s total sales of still-picture films, and only one commercial lab in the world still processes it and it was being made only about once a year.
I used Kodachrome for years, including 35 and 120 film sizes. The vibrant colors and stability of this film proved compelling, at least until digital and its immediacy became more compelling.
Kodachromes from the 1950’s and 1960’s are still as vibrant as the the day they were taken, unlike other images from that time period, Now we need to worry about how to give digital images that same stability, and the answer is not simple. Many digital images are not printed and if the images are printed, they may be on unstable paper. Consumers need to ask how long their photos will last now, rather than after it is too late.
See also http://homepage.1000words.kodak.com/default.asp?item=2388083 and http://en.wikipedia.org/wiki/Kodachrome.
All About Images Blog 
The problem is whether or not digital could ever have the same impact as a film like Kodachrome. The answer is most likely no. Kodachrome transparencies are the result of a very physical/chemical process (like all films, but even more so), and that’s where the magic comes from. Digital requires more steps, each of which is inferior in quality to transparencies.
I used some Kodachrome over the years…..it really was a wonderful film – I will be sorry to see it go. I am a photographer in constant turmoil….I love film (particularly black and white) but I find myself using digital more often now…..I took about 2000 ballet photos a few weeks ago under horrible lighting conditions……every shot was made at ISO 1600 and the images are still very sharp and will stand up to considerable enlargement (up to at least 16×20)….I never could have done this with any film ever made….just the fact that I would have been changing film so often would mean that I would have missed so many shots……PS. I miss Panatomic X too.