but the principal stays more or less untouched throughout retirement.

Whether or not that holds true remains to be seen; I'm sure a lot of people are planning on dipping into their investments for personal reasons ("You can't take it with you") or necessity (nest egg never got big enough to become a perpetual motion machine).

I also expect that ballooning medical costs at the end of life will wipe a lot of wealth and potential inheritances off the map, and that much of what is inherited will be promptly liquidated by younger generations to pay off debt/enjoy the windfall, etc.

I guess that's a long way of saying that I think you're generally right, but that I expect it will take longer than we think for these assets to be liquidated, which means that the time horizon for growth might be 30-40 yrs instead of 15-20.