The current keys will of course work as before. It is more that their new offerings might change this model all together by tying authentication of the key into some cloud service requiring non-standard drivers. Probably unfounded fears as this would make the keys less attractive to their user base.

Yes, there are competitors. But I really don't want to be reliant on Google as a company. I guess Solo Keys and Nitro Keys could be good alternatives, but I really feel Yubico has a great reputation as far as hardware token companies go.