Don't worry, Weird Al's not going to go away completely. He just points out that the Internet is starting to make his act a lot harder. By the time he gets an album together, there's already been hundreds of parodies of the songs he's parodying all over YouTube. So, he's got one album left on his current contract, and once that's done, he'll probably give up on traditional albums and just head to digital distribution.
To be fair, though, Weird Al has been saying this for some time, as to how his job is getting more difficult. As he said in 2006, back when his album Straight Outta Lynwood came out, it's not like the old days of the 1980s, when he'd just pick whatever artist was currently in heavy rotation on MTV. With the further fragmenting of music genres, it's tough to choose which artist to go by.
Weird Al started getting serious about digital distribution back in 2006. When his "not allowed to be released legally" single You're Pitiful (a parody of James Blunt's You're BeautifulI) couldn't be released, he made it a free download at his website, and it promptly went viral. Thinking there might be something to this digital distribution, he made his big experiment in the fall of 2008 with Whatever You Like, a parody of Whatever You Like by T.I. Within 2 weeks, Weird Al got T.I.'s permission, had the song written and recorded, and out online while the original was still at #1.
The experiment was successful enough that the next year he released the digital EP Internet Leaks. As Weird Al pointed out, he tends to record the original songs on his albums first, and then record the parodies closer to the album's release so he can parody something current. So, he figured, why not release all the original songs while waiting to figure out what to parody? And that's what he did.
Internet Leaks wound up being half of his 2011 album Alpocalypse. So, yeah. Weird Al's revelation that his next album may be his last is nothing too Earth-shattering. He's just been working towards it for the past few years. As we've seen from the multitude of parody videos flooding YouTube, that's just the medium for parodies these days. Only makes sense that Weird Al is going to get on board.