This argument is all about magnification. The more you enlarge an image, the more visible things like motion blur will be. This only relates to pixel pitch in as much as people are buying higher pixel density cameras because they're hoping the extra pixels will allow them to enlarge (magnify) more.
Given identical technique, all other things (dynamic range, noise, etc.) being equal, the same size print from e.g. D800 & D700, the D800 print may show more detail due to the finer pixel pitch, but if poor technique (either camera movement, incorrect DOF, incorrect focus, excessive diffraction, etc.) is obscuring that detail, then the D800 could be reduced to being equal to D700. It won't be worse, because the same technique flaws are subject to the D700 as well. People who say the D800 will show worse have failed to account for another variable in their experiment. Most often this variable is magnification, by looking at 100% pixels on screen or print, they enlarge the higher pixel image considerably.
The smaller pixels may allow you to enlarge more by capturing more detail, but given that you will also be magnifying flaws in technique, this ultimately means higher pixel density will ultimately yield diminishing returns.
Are we there yet?
Given that f/8 is generally considered most lens' sweet spot, and also widely recognized as the de-facto general purpose aperture setting, and that's it's been reported (with math that goes over my head) that D7000 & D800 will be diffraction limited smaller than f/8.9, I'd say with this latest generation we're about at the ideal pixel density now.