I think the turn around will come where small body shops will get their share of the business.
Look at Walmart, they took over all the small stores in an area, and are now finding out that they are not making the money that they thought they would.

Large shops , controlled by the insurance industry will not put up with strict rules laid down by the masters and will demand more money for their investment, raising the profitability of shops. (including the small shops if the owners are smart enough to respond to a changing world)

A small shop will just have to learn how to conduct a business, in addition on how to repair damage.
No small shop can hope to compete with a large shop, but can earn a good living by working smarter.
Remember, the customer controls where the car is repaired, it is up to the small guy to enlighten the customer to the advantages of his shop.