I'm willing to bet that, at least in the infancy of the technology, there will be laws that require at least 1 capable driver in the vehicle at all times. This would still probably effect the industry greatly, as they could then hire almost anyone with a license, but 3.5 million jobs wouldn't just drop off the face of the country.
Well just like Emails haven't completely replaced Postal services. You will still need drivers. You will need people to drive Ambulances, Race cars and things like vehicles for banks and other important things.
But when big paradigm shifts like this happen, generally a lot of people end up loosing jobs.
Autonomous racing series - now that will be interesting. I don't think it would look like current motor racing - it is centered around the cult of the driver - but more like an outgrowth of robot wars. We could already have remote controlled race cars where the drivers sat in simulators and drove remotely - but we don't because people want to be in the hot seat.
Driverless racing cars could go incredibly fast - and require real solutions to large computing problems. And this would push development of driverless cars along quickly, just as motor racing pushed along the infant car industry quickly.
One-make or control racing series ostensibly pit equal machinery, with only the drivers brain making the difference. Presumably in an autonomous series, there would be little technical rules to force equivalent vehicles. Thus one car would be optimised for a certain type of track, and one for another. Different teams can come up with different strategies, and there is always the element of chance.
It's near-impossible for a motor race to end in a tie because there is only one optimum racing line, and only one car can occupy it at a time. Just removing the drivers wouldn't be enough to change the results.
Yes, you'd get one team dominating as you do in any motorsport, but the methods to temper this are well known.
Basically it would be like current motorsport but with the element of risk for the driver removed, which would result in higher speeds and greater risks being taken. I think it would be exciting to watch.
I'd imagine that the winner would be the one with the best strategy. My feeling is that with as many variables as you'd see in a race, that it'd be impossible for a single AI to perfectly take all opportunities. And I can imagine some outperforming others in slingshotting or taking curves. Of course, it all depends on the rules of the race.
Actually, I think it might end up being cheaper than F1. No celebrity driver to pay millions to and no very-high safety concerns! Although given that most of the human population will probably not relate (or out-rightly reject the idea) to the sport because of the lack of driver, there might be less money in it.
I think your last point is the most relevant. I've spoken to a couple of huge F1 fans about this and they both seem to think it's the most stupid idea they've ever heard. They want less computers and more human control in their F1 cars, not the other way around.
Personally I have a dream of one day seeing an AI car competing against humans in an F1 race, but alas I fear it will never happen.