As of now there seems to be no limit on the number of waitlists for trains hence you can see lots of waitlisted psngrs in reserved coaches. To some extent this will stop if the new thing is implemented. But having said that i think they should not entirely remove waitlists.
They can set a lower limit on the maximum number of wait lists issued for a train and even after that if tickets are still available closer to journey date, either add it to tatkal quota or issue through counter as current reservation [This might be a weird suggestion though !!]