Absolutely.
I still don´t like it, but more power to you in your campaign. In my campaign, however, if i say "Alustriel never existed, ever" or "the Dragonborn blood cult has a sprawling citadel in the Quivering Forest", that´s how it is.
These boots are made for walking.
This setting is made for changing.
That the FR somehow emanates an 15´ radius aura of "only change if the control group would attest your changes an acceptable level of verisimilitude" is simply something that grates with me.
Certainly, but that's the problem with any published setting; if I ran an Eberron campaign with such changes, I'd expect hard core Eberron fans to raise their eyebrows, too. I think it's best to discuss such things with the group when you pick up a setting for the first time. In my group, for example, we have a couple of FR "loremasters" who can spot any change from the canon... the thing is, as long as it makes sense (it's internally consistent with the setting) we don't care. For example, our AoW campaign set in the Western Heartlands has included NPCs and adventure sites from other regions, but they fit the plot seamlessly, so why would we have an issue with this? I might use those same NPCs and locations in another part of the Realms (for another group) or even Golarion, if I feel like it.
Like you said, a DM's word is "how it is" in his/her campaigns. As a player, I might have an issue with major changes such as a homebrewed deity replacing Tempus or Cyric or Alustriel never having existed, but in the end it comes down to how and why; for example, if you said that Alustriel doesn't exist anymore, because she has vanished from the city some years back (and rumours speak of some high-and-mighty planar entity having her as a prisoner), I'd likely find that believable. But that's just me; your campaign is your campaign, and if your players are completely fine with everything, you're doing it the "right" way.
My advice to everyone is that use what you want, and change the rest; if someone in the group has an issue with it, try to talk with your players and tell them why and how it happened.