It probably will get worse (and I wasn't disagreeing with you -- just expressing my pessimism).
PBS ran a fairly good documentary last year, which I recommend, based on the life of three Tamil activists and the paths they took to provide some insight into the problem.
The LTTE, the ostensible target of the current government action, has served the Tamil/Eelam cause very poorly. Alienating India (whose reentry into the problem it recently sought!), at a time when it enjoyed tacit (at the centre) acceptance and explicit support (in Tamil Nadu) was the crowning "dick move". IMHO, this one is over, unless India intervenes, and I doubt India will.
--ravi