Yes, but that's entirely the issue. If the game is set up so it's extremely daunting to come at cold (1,000 pages of Core Rules, $100 buy-in, whatever), then you're basically only selling to people who are already enthusiasts. The hobby can only grow by the network expanding organically - you have to know someone on the inside to help you along.
But that network isn't terribly easy to find. Many games don't talk about their hobby, for fear of ridicule (or, in some places, worse). Many others have their group, are happy with that, so feel no need to seek out (or even welcome) new players.
I had lived in Falkirk for three years before I found any other gamers in the place, and it wasn't that I wasn't looking. Given that I was actively searching, and that I already knew what to look for, what chance does a curious kid without that experience have?
If the game is created for, marketed to, and sold to those who are already enthusiasts, and if it remains hard to come in to cold, then Ryan Dancey is pretty much right - we're heading for the fate of model railways. Those kids who would be curious about the game, but don't have an immediate and obvious connection to the network? They'll go play WoW instead.
I'm all for expanding the game beyond its base. That said, I think it has to be done by people, not products. Is it realistic to think that a bunch of novices could pick up some books on *any* form of D&D and start playing cold? That just seems unlikely for a hobby that is inherently involved, complex, and requires a group.
By comparison, imagine a group of children picking up a football, going out to a field, and starting a game. That's not what happens. Either an older person who knows how to play teaches them or their parents sign them up for Pop Warner (or maybe they watch it on TV and give it a shot based on that). A group of novice theater enthusiasts doesn't usually get together spontaneously and stage a play, but there are plenty of clubs and classes that help them do that (although schools' art budgets are a concern there).
By comparison, people do pick up and play WoW, Dragon Age, and any number of other video games without much help, and a group of people will pick up and play a board game like Monopoly or Settlers of Catan based on the instructions inside the box.
My conclusion is that D&D has more in common with the former group. It is a socially based hobby, whose codifed rules are only part of a larger set of implicit rules which are determined by the group playing it.
I would like to see beginners start playing by themselves, and I applaud Paizo for its Beginner Box (I wish 3e had had a similar quality product). I think it's great that people develop their own styles independently that way (mine is certainly not what I would have learned had I not been relatively independent). That being said, I think even the simplest rpg rules are a tough starting point, because the broader concepts of understanding roleplaying, group dynamics, and how to interpret rules are things the books can't really teach you (the good ones do make an effort, though). There's also the stigma. Thus, I don't think that specialized beginner products will ever be the largest entry point to D&D. I think it will either be experienced gamers from other fields who are ready to pick up the full rules, or beginners being taught by veterans, either as friends or through some kind of organization. I wish there were more gaming clubs in schools.
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All that said, the hobby won't die no matter what. Regardless of what happens with 4e, some version of 3.x will always be widely and freely available. There will always be a huge inherent audience of people who read Lord of the Rings, watch Game of Thrones, or play Dragon Age, all of which are going to be around a while (who reads books about model trains?). Most importantly, the inherent desire for creative expression that people possess isn't going anywhere. Some form of rpging has to be around to fill the enormous demand for it.
