He'll be fine, but the 2010 Sox will not be fine. It is a poorly put together team that needed to stay perfectly healthy to compete. A couple of injuries and they can't cope. As for Papelbon, he'll have 4 or 5 very productive years, whether for us or for someone else. But I do agree that if he steadily gets worse, he'll suck.
Edit: He is far from this teams biggest worries. Start with the starters for worrying. Then go to the defense that has been handing over games.