Unfortunately, I think the popularity will suffer a bit. Hopefully the International Softball Federation's campaign to reinstate softball will make up a little bit of the difference. Check it out: Backsoftball.com
I do believe it is bad for the sport. Softball is growing on a national level. You see college games on TV on a pretty regular basis. Also players are beginning to recieve national attention, i.e. Jenny Finch. There is a market for this sport and people want to see them play. The Olympics would be a nice tool to help the sport of softball grow.
In many sports (including softball) the Olympics is unfortunately the only national/international stage for people who aren't otherwise involved to be able to watch, so it can do nothing but hurt the spreading of the sport.
I agree with Katty. Over time, the impact will be felt. National and international exposure is needed to keep the interest and participation in the sport growing. When softball was first introduced as an Olympic sport in 1996, my daughter was 13 years old. She played shortstop and admired and aspired to play like Dot Richardson. There were Dot Richardson posters and books all over her room. ASA softball registrations and quality of teams seemed to increase as a result of the Olympics, especially in the Midwest.
The Olympic exposure and love of the game motivated my daughter to learn as much as she could and work towards a goal. For the majority of young players, they wont make it to the Olympics, but their hard work, talent and motivation may be translated into a college scholarship as it did for my daughter. Most 10-13 year olds arent even thinking about college at that age, but the popularity of the Olympics and the softball players will catch their attention and give them a role model and reason to become a better player. I also think its important for our girls to have national female role models to look up to and to believe that they can achieve their highest dreams.