I remember shooting TFP back in the 80's. It didn't kill the industry then, and its not going to kill it now. I still shoot with some models for TFP if its something for my portfolio, the model is very experienced, and they have a look I am after. I get TFP requests all the time, and 90% of them I turn them down and send them my rate sheet.
What I do find is there is a influx of new models into an industry that was extremely competitive to start with. But, there are also a lot more photographers entering the industry as well, and they seem to balance themselves out. There are a lot more new models doing TFP, and a lot more photographers shooting TFP with them. At the low end of the market, there is a flood of TFP arrangements, where in the past is less.
However in the mainstream market, I'm still paying models the going rate, which can be anywhere from $100 an hour to $2,000 per day or more depending on usage. And while there are many more photographers doing TFP, it hasn't made a dent in my rates. So all in all, it hasn't seemed to make much difference at the professional level, but seems to have exploded at the lower end.
For those new to the industry, its a good deal for both sides. For anyone trying to make a business off model portfolios, and low end model agencies that make a significant income off the photography rather than booking jobs, I'm sure it hurts. But for the industry at large, it hasn't changed things all that much IMO.