I think that the idea that all languages but English are going to fade away makes sense to people who only speak English.
I've lived in Germany for a couple years, and have noticed that when native English speakers come here, the Germans all speak to them in English, and when the English speakers go away, the Germans immediately revert back to their native tongue. They can usually do the same for French speakers and sometimes Spanish or Italian too. What this means is that Europeans speak several languages, and English speakers speak one, and therefore English speakers only encounter English.
I suspect the same is true in Iceland, but I have never been there so I can't say for sure.
I don't think what's being proposed here is that all other languages will automatically fade away. It's that a language needs a critical mass to actually produce all the cultural artifacts that make speaking it worthwhile. And it's possible that in the modern world the required critical mass is larger, since the expectations are higher.
Literature and music get made even for tiny languages. AAA-video games mostly get made for maybe the top 10 languages; teams from small countries can still make them, but they have to make sure the project has appeal worldwide. Making a Facebook clone with better Icelandic support? Not going to happen.
In the linked article, it is Icelanders too who are complaining about domain loss. It's not just a matter of foreign visitors having a mistaken impression of the local sociolinguistics.
I've lived in Germany for a couple years, and have noticed that when native English speakers come here, the Germans all speak to them in English, and when the English speakers go away, the Germans immediately revert back to their native tongue. They can usually do the same for French speakers and sometimes Spanish or Italian too. What this means is that Europeans speak several languages, and English speakers speak one, and therefore English speakers only encounter English.
I suspect the same is true in Iceland, but I have never been there so I can't say for sure.