This article doesn't seem to say that 4e is not doing well, but rather that it's not in "the cycle" that would make it sell as well as 3e. That seems to make sense to me. I mean, everything else seems to be cyclical (the economy, family addictions, etc.) so why not our favorite hobby?
The thing about applying a cyclical generation theory to the hobby, or D&D in particular, is that there doesn't seem to be any sort of thought as to what causes the cycle. With capitalist economies, there is some rational theory behind what is going on with these recessionary cycles. What Joe Goodman posited doesn't present any rational theories as to why D&D should be on a generational cycle. He's just looked at the data and noticed one complete period (peak to peak) and has extrapolated from that the idea that there is a generational based cycle effect going on. I won't dispute his empirical numbers, but I do dispute this idea this is definitive proof that there is some kind of generational cycle effect that explains everything (e.g. why 4E is not doing as well as the 3E peak). There could very well be other factors that explain things.
Heck, here's one rival theory. In tough economic times, people turn to games for a release from the pressures of life, and to find relatively inexpensive entertainment, The peaks in D&D (and/or hobby gaming) coincide with recessions. There was a bad recession in the early 80s. There was another after the dot com bubble (2001 peak). There was one in the early 90s (but CCGs arose and stole potential D&D customers so parts of the hobby were still doing very well). And there is a particularly deep one now so the gaming hobby should be doing relatively well. If 4E and other games fail to take advantage of the fact that people need an avenue of "escape" from the somewhat depressing economic realities, then perhaps they are doing something wrong this time around.
Once could go on to come with other ways of explaining the peaks other than these cyclical theories - such as what was going on with the game and the hobby in general. AD&D was when D&D finally burst into prime time in the public consciousness. 2E was warmed over 1E so it didn't go over nearly as well and then they ran into the CCG phenomenon. 3E was a resurrection of the game on a much more consistent set of mechanics and a disruptive force in the hobby (with the OGL). It transformed things. 4E is a radical departure from what came before so it should also have the potential to do great things for WoTC if it was managed correctly.
I guess my point is that this idea of a generational cycle sounds a bit dodgy and simplistic to me as there are many other factors that could be going on.