I'd agree, with the availability of glass monitors for diagnostic purpose and the end of switches for toggling in initial loaders blinkenlights became obsolete.
The transition is probably well illustrated by the Datapoint 2200 smart terminal (which famously provided the blueprint for the Intel 8008): An early illustration shows the machine with a DEC mini style row of console switches [1], but when it was announced in 1970, the toggle switches were gone. Ironically, the early 8-bit micros which sprang off from the DP 2200 were probably amongst the last machines to come with toggle switches and console lights (again, because of the lack of built-in diagnostic facilities).
[1] Concept illustration of the Datapoint 2200 (John Frassanito, 1969) – arguably, console switches were just what you expected from a "self-respecting" computer at the time, but, by the time the design had progressed from concept to actual hardware, these just didn't make any sense anymore: http://4.bp.blogspot.com/-2urGdLzMYf8/VnY76lBDUlI/AAAAAAAANS...
The transition is probably well illustrated by the Datapoint 2200 smart terminal (which famously provided the blueprint for the Intel 8008): An early illustration shows the machine with a DEC mini style row of console switches [1], but when it was announced in 1970, the toggle switches were gone. Ironically, the early 8-bit micros which sprang off from the DP 2200 were probably amongst the last machines to come with toggle switches and console lights (again, because of the lack of built-in diagnostic facilities).
[1] Concept illustration of the Datapoint 2200 (John Frassanito, 1969) – arguably, console switches were just what you expected from a "self-respecting" computer at the time, but, by the time the design had progressed from concept to actual hardware, these just didn't make any sense anymore: http://4.bp.blogspot.com/-2urGdLzMYf8/VnY76lBDUlI/AAAAAAAANS...
(From http://bugbookmuseum.blogspot.co.at/2016/01/datapoint-2200-8... – Mind that Datapoint is then still CTC and the terminal is marked "Veripoint 2200" in the concept illustration.)