Photography replaced painting for creating a realistic likeness, but painting as art had moved beyond that already. Photography became a new art form itself, alongside (instead of replacing) painting.
Yeah, I do not buy the idea that Photography replaced painting. Especially since capturing abstract forms, and less realistic interpretations is still something hard to accomplish in photos.
It did absolutely replace the need to commission someone to draw you, I guess. But that is a small subsection of what painting is and was.
There's a simple test: Do we have less of more illustrators now than we had in 1816 (quick Wikipedia lookup for when the camera was invented)? We should probably adjust this for total population, i.e. compare the percentage of illustrators. I don't have the numbers, but my gut feeling would be it's a lot higher now than it was back then.
The fallacy is thinking that humans only do work somebody needs, and that our needs are static. Turns out they evolve, sometimes in quite unexpected and even hilarious ways. Humanity seems to have a predisposition for keeping everyone busy.
