I think they can co-exist: the market and the use cases are really broad and there's a lot of space for a wide variety of tooling.

I wrote a blog post about Docker and Configuration Management that elaborates on this:

http://kartar.net/2013/11/docker-and-configuration-managemen...

And I wrote a blog post talking about using Puppet and Docker that talks about how they might interact:

http://kartar.net/2013/12/building-puppet-apps-inside-docker...