Being a diehard Android guy since the OG Droid came out on Verizon I am going to give my $.02 for what its worth:
Chances are that if Apple introduces a 4.7in iPhone that has similar dimensions to the leaked bodies I will swap out my Google Play Edition HTC One M8 for it. For years even the most diehard Android guys have been jealous of 2 things:
1 - Fantastic camera (w/great features)
2 - Something that "just works"
Regardless of how polished Google has made Android, even in 4.4.3, Android still cannot achieve the level of polish in iOS. Yes, Android is a little snappier, quicker on the transitions and more flexible. But iOS (especially in 8) adds a lot of Androids flexibility without sacrificing its security and its polish.
Customizing Android is a large benefit but at what cost? Most android lockscreen replacements are not a 1-1 replacement. They dont work all the time, they dont work on boot, the system can kill them, they sometimes cause the device to unlock to the old one, then the new one before actually unlocking...... Its a common thread. Its fantastic to have those options, but I find myself avoiding them in the name of stability. Likewise, many applications are built catering to the largest share of users leaving awesome new APIs introduced in new versions unused.
I will miss the ability to copy any file to my device, and I will miss some of the awesome features like Google Now integration. But Google just does not have a good grip on Android right now. Its getting better, but when OEM's are allowed to just change whatever they please (such as the lock screens, camera apps, dialers.....) you wind up with a very.... well a very fragmented Android with no clear direction. No matter how hard Google tries to change that right now, its almost impossible at this point.
Android skins that deteriorate the best experiences (LG & Samsung are mainly at fault) proliferate so much that its almost useless for Google to properly develop the base Android experience. Its sad... Some of KitKat 4.4's best features are hidden on the most common devices. Google Dialer Lookup -Nope, Powerful lockscreen - Nope, Google Now Launcher - Nope, Tap & Pay - Nope....
Will iOS 8 kill Android, No. Not by a mile.
Does Google stand to lose a large portion of the higher end market share... Yes