What happens at the user/OS level when an SSD finally wears out?
"Does it just get slower and slower
  running garbage collection more and
  more often trying to find a place to
  store data as the flash storage system
  degrades?"


^^ This is what I've seen on two occasions (Aftermarkets tho, possibly the same in Apple drives).

They didn't entirely stop working because I eventually replaced them, since things become like a Windows XP after three years of use and no maintenance.

Another SSD I remember failing did it probably from day three, when it failed to mount on a few occasions. Then it failed to mount again later the same day until it eventually never mounted again. It was under warranty and I replaced it. 

The SSDs I still have (non Apple) don't show signs of shrink, probably because the space you lose is not a lot compared to the size of the drive. I'm guessing that would be the case. 

Although drives tend to live 2-3 years (SSDs), I'd say be prepared for a -possible- change after 1 year.