I'm wondering, do musicians who spend so many hours learning and perfecting how to play well, really appreciate tools like these, that allow people who don't do the work to learn how to play well, make recordings that sound like they can play? It seems that it gives even more power to the recording engineer and producer, and less to the musicians. Great for good-looking people who can't play, not so great for wonderful players who are not good-looking. Now they can be replaced as session players too. Soon, the software will allow this processing to be done live. ouch.
Is this to be feared or embraced?
embraced, for sure.
Don't worry about it taking over talent. for a start its nigh on impossible for this technology to become a 'live' thing. it's not possible for most artists and for even the very biggest artists with the biggest of budgets it would be so hard and costly as to be unfeasable.
you can't fix a late note live! if its late it can never be put back in time cos that time has gone!

you'd have to work on a band/audience delay kind of thing which requires a huge amount of planning. Also, the actual BAND members for the sort of artists that have that money are normally the cream of the crop and dont need any of this stuff, its the normally the front-people that need it in those kind of bands!
You speak of power in the studio as though it is a power struggle between the musicians and engineers, it should never be this way, the engineers job is to take the performace the musicians give, get the most out of them, and then get it sounding as good as possible before the cd hits the shelves. VERY FEW big engineers (outside of the super cheesy pop market) abuse this technology. for a start because it DOESNT SOUND AS GOOD AS PLAYING IT CORRECTLY!
you'll notice this if you try to edit a part thats full of feel with flex time, it just ruins the groove. its really useful for nudging the one wrong note which ruins the otherwise perfect solo, but it does not replace playing well. Good engineers learned this years ago when the first programs that could do this were unveiled, its a last resort tool, but with each new technology it becomes easier to fix a little note without ruining the feel of the rest of the piece.
for people working at home it can be fun to re-write parts completely with flex time but it's nowhere ner the stage where it can replace a well played part (and I don't think it ever will be, until computers can hear music like we do!) even a master editor is very hard pressed to make a realistic sounding 'loose' part with an audio editior. it takes hours and normally the original take sounds much better.
the big cheesy pop stars use it to sound uber perfect but hey, so what, its not as though they are in the buisiness of MUSIC anyway!
I feel quite passionate about the whole subject, the people who make the best records use these tools sparingly, and to combat tight budgets and limited studio time, not to mention idiotic A&R men and label bosses breathing down there necks, but it is almost always done with a musical ear. Most good engineers are good musicians too! there are those that abuse it but they can have there over processed pop as far as I am concerned!
flex time in logic is a really great step forward, I think. Its not quite as intuitave as beat detective yet, but it doesn't slice things into a million pieces and make your computer slow down (like beat detective!) which is a bonus for me from the offset. there are a few bugs but if you follow the tutorials and learn to do it properly most of them dissapear. MOST of them, logic has a HUGE feature set, I still keep finding things in the drop down menus and thinking 'wow thats really useful!' and this seems to sometimes result in glitches as it tries to accurately do SO much. its is such a vast program!