Island trials will replace them. They'll still be around in some capacity. As of right now I don't expect Island Captains to be treated any better then Gym Leaders.
Frankly, it doesn't matter how close Island Trials resemble Gym Battles.I get what you're saying but ask yourself this, do you REALLY think the writers will handle these characters better than they have currently? Hell, people already consider Trials to be basically gyms in a different name. I don't trust the writers to take advantage of this. Remember what happened with Citron/Clemont?
They aren't Gym Battles, and that makes all the difference as far as potential for Mallow goes.