It amazes me how many sites out there do not have a mobile friendly site. I have a hunch that 2014 will see some sort of penalty from Google for those that are not mobile friendly. Thoughts?
I don't think Google will penalize sites that are not mobile friendly. But it is better to optimize for mobile versions to get more traffic and profit your business as: there was seen 65% hike in Smartphone penetration in 2013 and as per analysts it could be as high as 75% by the end of 2014.
Too soon for that, there are far too many sites that aren't mobile friendly yet and I don't see this happening for another year or two yet. At some point sure, but not in the near future. If anything mobile search results may provide favoritism to mobile sites but not the normal SERPs.