There will be some great and fairly good keywords that will remain registered simply because the domainers that scooped them up will be hesitant to drop great keywords, it goes against their nature. But over time I would bet this extension loses ground.
I've never liked the idea of this extension. I think the whole point of new gtlds is to try to improve upon the idea of .com, to make the overall domain name more specific or niche in nature.
For example, if you asked 100 different people what type of sites .com is supposed to focus on you will get blank stares; .com is king after all, there is no focus, you can find everything on .com . If you ask 100 different people what type of sites they would expect to find on the .auction extension, most would probably say, "Well, I bet there are a lot of auction related web sites on that extension. Gee I wonder if pallet.auction or [ my hometown ] .auction has a site on it."
I'm willing to bet if you asked 100 people, ten years from now about .xyz their answers would be all over the board.