This is a very interesting thread. :-)
I kinda agree and disagree with your friend.
1) The game will most certainly cap out with characters in the show, but I have a feeling a big reason why the show continued was because of this game, so a bunch of new characters were added to the roster. They also showed us they're not afraid of adding characters that aren't in the show so if this game outlived everything usable from the show and was still selling well they'd simply make more characters and building. As long as Matt Groening is involved then I believe most would be happy with that.
2) The land issue however can definitely become a problem. Tablets seem to run this game just fine, but I'd assume there's a finite amount of potential land so with current tech it'll only go so far. However tech advances and so does processing power on phones. I'm sure two years from now phones will easily be able to run a map that's twice as large as this one. It'll come down to how well their game engine is able to work and how far back backwards compatibility goes. The developers have to constantly balance that too so that has a big impact on how far the game can go. Theoretically speaking of everyone had current gen high end devices they can go way crazier with the game, but they can't because of people who use older phones and tablets.
3) People have been talking about this games demise ever since it was released. The fact of the matter is, as long as people are playing and paying it'll still be going. People are hyper cynical for whatever reason but one thing they fail to remember is that money talks and there are plenty of people who pay so they just need to calm down.
