I should qualify that my perspective is skewed towards production, or commercial use of video...so it comes down to what the user sees as adequate. The GoPro's form factor is great, but when my pals and I who shoot production-quality HD and compared our test dive footage we found that the images were blurry, had off-colors, artifacts of pink, off-reds showed up when we got deeper. Kelp colors looked unnatural. At 80' feet plus the footage without lighting was pretty bad - and when we lit it up with HID - not much better. In all fairness, the sensor capturing the image in GoPro has to bee pretty tiny and not a fair comparison to 3 chip, or large one sensor cameras.
I also notice that most of the ads for GoPro feature underwater footage not too much deeper than 10'. We did two test runs on the camera and decided we'd had enough and would use it for surface applications like boat-mounted shots, climbing shots, hiking etc. I think this is where smaller HD mounted cameras really shine.