I take your point but in general change takes time. Many people still prefer to use coins/notes for small item purchases such as newspapers, bottles of pop/water etc, so I can still see a large amount of the low value tickets being paid for by coin (however accepting notes will no doubt but more valuable for low value tickets compared to using plastic).My experience with using Oyster cards and LU in general is quite the opposite. I find that the now essentially I can use plastic for everything from buying a coffee to transport I rarely actually carry cash and often have to consciously avoid places where I am unable to use it. Anything that streamlines this further is bound to get a huge uptake in my view. I would also imagine students (fundamentally lazy) getting the Metro into town will be far more inclined to pay and use the service if they didn't have to hunt round West Jesmond for change.
The new machines are also able to take PayWave cards in future, although there are seperate issues which some research has found on this:
1) People are reluctant to get their credit card or purse/wallet out of their bags as it is advertsing it to pickpockets
2) Not everyone has a PayWave card, and not all banks give them out
2) There may actually be another charge by the bank to use PayWave for transactions (details of this are sketchy at best as mos of the PayWave readers have been installed free as part of trials).
Time will tell.