The BCHL is going to respond to the availability and interest of players, and nothing in this decision changes the number of players who are looking for a place to play. One suspects that 18/19 year old players who have a scholarship in hand might want to play at a higher level if that's an option - and that means going to major junior. But is a 17-year-old with a scholarship in hand going to want to play three years in the WHL before going to college? - assuming this is only for 20-year-olds. It will be curious what the college coaches think - would they prefer their recruits playing against more higher-end talent in the WHL or easing into a Junior A environment where they're not playing 6 minutes a night?
So no, this doesn't mean the death of the BCHL or the death of Junior A. It may may return Junior A's place to a place where the classic late bloomer goes, or it may lead to more players using Junior A as a springboard to major junior (as was the case in the 1980s and 1990s), giving them an option to go to college if major junior doesn't work out.
I don't see the WHL wanting to absorb BCHL clubs into their league. Penticton and Vernon are both pretty close to Kelowna and Vernon is roughly halfway between Kelowna and Kamloops. "Territory" is a loaded word, because people think it refers to fanbases, but it more refers to corporate sponsors, and having four teams in that tight market would be problematic. Maybe this would be the thing that would entice the WHL to accept Nanaimo despite their rink, which doesn't meet current size requirements for an expansion franchise.
The other factor in all this is that one of the reasons the BCHL detached itself from Hockey Canada is because they didn't like that the WHL had more leeway in bringing in players from outside of BC to play. There have been rumours for a decade that the top BCHL clubs (more specifically, the teams with the richest owners, like Nanaimo, Vernon, Salmon Arm and a few others) had wanted to split off and form their own super Junior A league, essentially competing with the WHL. Those owners remain, and that attitude remains, that the BCHL is on par with the WHL, and should be treated the same.