Jeff Atwood has a rant against URL shortening services.
In short - he thinks that the URL shortening services (like TinyURL or Bit.ly) are going to kill the Web because of Twitter and urge to make money off them will destroy hyperlinks as we know them.
Except that they won't.
Here are my quick thoughts on why this is so:
First - while it may seem like everyone is on Twitter - most are not.
Second - The 140 character limit on Twitter will eventually go away. It's only limited to that because of SMS limitation. Saying you will only ever need 140 characters to communicate is akin to the infamous "You will only ever need 256KB of RAM".
Third - The URL shortening functionality will become more pervasive.
This is what I mean about URL Shortening services being Lemurs. In the biological tree where you find primates - there are actually two broad types. Apes (Gorillas, humans, monkees) and Lemurs. Lemurs are these cute creatures - primarily found only on Madagascar and are older than other primates. They are most notable for basically being the first animal to have an opposable thumb. But for a variety of reasons, they never further evolved and probably only exist because Madagascar is an island cut-off from the rest of Africa (thus lack of reason to further evolve) but enough food/habitat to continue to thrive as they were.
That's how I feel about URL shortening services.
URL shortening is the opposable thumb of hyperlinks. And the first URL shortening service (TinyURL) is kind of like the ancestor primate (the ancestor primate is the common ancestor animal that both apes and lemurs evolved from). The other URL shortening services that tried to do more than what TinyURL did are more like lemurs. They were the first to make use of this opposable thumb.
But I expect what will happen is that the larger sites will develop their own URL shortening links. This will likely happen because sites want to keep control of their links as much as possible and avoid possible issues with the URL shortening services (e.g. the service disappears, it starts to insert ads for your competition, etc).
Oracle has a form of this (occasionally you will see links like oracle.com/goto/db) as does Amazon. The popular Web frameworks will most likely give you a way to generate them as part of their standard function set.
But because there will be those who don't want to or can't shorten - you will still have enough to keep a few URL shortening services around to shorten them for you.