I wouldn't be at all surprised with the state of the economy as it is that this could possibly take a bite out of the JR PAss, especially to the growing number of Chinese and Korean tourists.
Possibly. But I think it will do more to concurrence the JR Passes that you can buy inside Japan (that are overly expensive compared to the one tourist can buy outside Japan). This pass could be a good thing for cash strapped japanese that wants to visit their over-stretched country. Maybe this will force JRs to offer a bus only pass. They have the network to make that kind of offer very interesting. I'm not sure about the extent of Willer Express coverage.
As for foreigners/toursits. I think bus passes like these could help some to extend their travel. One of the interest of traveling is actualy to see the land you're going through, not just cities.