I'd like to see a revival in coin-ops, but this most likely would not be it. In order to create a revival, you need to have consumers thinking ahead. You can't fuel the industry on nostalgia alone or else you'll never be able to bring new games to market. I think the best chance at bringing arcades back is to continue to provide modes/features in the arcades that you can't get at home. Graphics, unfortunately, are no longer a big draw. However, let's look at the top 4 arcade setups in the US:
DDR - Konami's really banking on the home experience at this point, but still nothing beats a good arcade machine. All the songs, better pads, etc., etc. Plus, successfully recreating the arcade experience at home can be expensive.
Initial D - Competition and the card system. Sure, if you get Special Stage at home, you can practice and all, but the wheel + dual-cab + card system (which you'd never have at home) you can't.
Soul Calibur II - On its way out at this point, I think, it sustained itself for a long time in the arcades with Conquest mode, which you can't really replicate well at home.
Golden Tee - Not a fan of this, but apparently a lot of people are, especially in bars. There are tournaments for it, and a netlink mode, I believe, that can give updates on special events going on throughout the country.
Notice that all of these games generally promote having a greater penis size. Each one offers the distinct opportunity to publically show off how much better you are than everybody else. DDR tournaments seperate the losers from the winners (also losers, but you get the point

). Initial D allows people to compare the times and cars utilizing the card systems (my friends just love whipping their cards out of their wallets and showing them to other people when they find out they play, too). Soul Calibur allowed you to climb the ranks and lord over your own army. Golden Tee has people often competing for cash prizes.
In Japan, you see a similar tend - the increasing focus on card-based games (like Konami's Bemani EEmall system) and network games.
On a bit of a tangent, I think one of the reasons that DDR's popularity tanked in Japan was that it never evolved along with the rest of the Bemani games. It had virtually the same cabinet since it was introduced and, even in its later incarnations, never included the EEmall system. It was old technology and old gameplay, and people got tired of it. Perhaps if they had actively pushed it harder later in its life, they could still be producing new arcade versions.
Anyway, the key to an arcade revival, if it happens, can only be found in providing unique, competitive gameplay features that cannot be found/replicated very well at home. This has been the philosophy since the arcade's very inception. As the originator of the thread pointed out...those businessmen were actively trying to one-up eachother by getting a better score on Ms. Pac-Man. And just look at other games that were relatively popular in recent years, like The Grid.
The arcade industry really need to be rebuilt from the ground up. Most arcades need to purged of the large amount of absolute shit machines taking up space. By cutting out the crap, arcade owners can cut down on maintenance costs and perhaps put that money towards better games. Just as well, if arcade manufacturers want to cut down on the costs of making the machines, why not cannibalize the gazillion CarnEvil machines out there that nobody ever touches? Recycle them and make something new.

Arcade owners also need to be informed. Most of them don't care, don't give a shit, leave games broken, and never listen to their customers. On top of that, they're usually very rude. I guess I would be, too, if my job was maintaining a crappy arcade, but they fail to realize they can make things better.
From this point, arcade games need to be rethought and restructured. You want to produce unique experiences, but these experiences NEED to be liked by the public. Also, its usually unwise to produce absurdly expensive machines. I saw games like Ferrari F355 or whatever at just about every arcade I went to for awhile. These hulking beasts were no doubt expensive, but nobody played them, either. They were expensive to play, too, and not very fun. Huge mistakes like that hurt consumer interest, arcade owner profits, and arcade manufacturer sales. Once you see how many recent projects have gone down this path, you start to get a picture as to how the arcade industry has fallen. When not ONE crucial party sees the interest in arcade gaming, then you've got a problem.
Also, purge the crappy pseudo-manufacturers coming out with shit like Invasion or Star Trek: Voyager. They're cheap, but don't make arcades look better and nobody wants to play them.
So the key ultimately falls in creating a fun and competitive experience at a reasonable price. Its not easy, but since arcade games are more specialized than console games, developers should be more cautious about what they put out anyway. One more thing companies could do, though its highly unlikely, is to hold back features or console releases intentionally, letting arcade versions take up the profit like they used to, and then later releasing the titles at home (if at all).
Will any of this happen? Probably not. The arcade thing is more a matter of pride at this point, and I doubt many companies would be willing to give up temporary profit to restructure the arcade industry over the long term. Still, I think its the only way, beside perhaps creating a LAN-center/arcade hybrid.