It kinda happened to Robbie William here. Single after single... at one point people just had enough.
Elaborate, what do you mean by 'had enough'?
Release-wise (music) I don't think there's a need to worry. Akimoto Yasushi has had enough time to know the pitfalls of cranking out 5 Baby! Baby! Baby! singles in a row. He knows how to change it up, and still maintain a semblance of similarity, so people say "Hey, this isn't typical AKB48, but it is". At some point it ceases to be an issue and just the name sells. Yasushi also has a great weapon in the large talent pool he has. He could literally change out the whole group and still call it AKB48. And while he
wouldn't, that represents how much diversity he has at his disposal. While I think AKB48 should stop cranking out so many singles in a short span of time, my concern is more of the creativity running out (and then falling into the trap of releasing crappy singles) than people not buying them. I mean seriously, B'z has what, 33 #1 singles or something? You can't get that if the population is too quick to tire of stuff, even if you're B'z.
'Zillions of merchandise/DVD releases'. Does AKB release a lot of DVDs? Serious question. I ask because it seems like most of them are the norm even for other cases. For example, Shukan AKB and Majisuka Gakuen are both TV shows, and it's pretty normal for DVDs of those to be sold. Concert DVDs are par for the course as well, and I think most would appreciate being able to see stuff they weren't able to see personally. As for merchandise, I'm thinking it doesn't affect the general population at all. At some point most of it is idol otaku territory and we all know how much they get sick of stuff. And the variety thing applies as well, there's never too many things to choose from, if you're a casual fan.
Where AKB48 are now, I don't think a break would kill them. Although the extent of the break (just AKB48, or all AKB48 girls) plays a huge role in my answer. If AKB48 just stopped releasing, they'd come back to a 'AKB48 makes a comeback!' as opposed to a 'AKB48, who used to release hits like Sakura no Shiori..' But with the extent of their reach (Variety, Drama, Movie, Music, Lives), it would definitely be possible to scale back on something while still maintaining a presence in the sphere of entertainment.