prosfilaes
Adventurer
As far as the "state of the hobby", I believe we are talking about two different things. Two things that influence eachother, with only one depending upon the other. Those two things are "the Hobby itself", and "the RPG Industry". As long as there is just one person still wanting to play RPG's, then the Hobby is alive and has the potential to bring in new players (though likely to be more difficult), independent of an RPG Industry. I just don't believe it follows that the hobby cannot survive without the industry. However, the Industry is dependent upon the Hobby for continued existence. If the Hobby ceases to exist, the Industry does also.
The industry could still exist; there's still going to be a demand for quaint 20th century memorabilia, and there may be a scholarly audience for reprints (particularly PDF) of old D&D books for cultural study. That's about the level the hobby will be without the industry.
If there is just one person wanting to play RPGs, the hobby is not alive. There has to be enough people who can get together to at least play the game, to say the hobby is in any way alive. And at that level, the industry can survive without the hobby. It's not a terribly interesting level. As I've said before, if there's not new dice and new books, there's not going to be new players. Death is a vicious cycle, and not many people will get involved in a hobby that looks like it's dying.
Industry icons are stable points in the RPG society. If we didn't have D&D, GURPS, Rifts, Call of Cthulhu, the Hero system, and a few other games, then we'd lose people who felt they couldn't keep up and that everything felt strange and new. What amounts to the loss of the WoD hurts roleplaying, because it means that WoD players will never check out how WoD is doing now and think to rejoin the hobby. All the used copies and PDF reprints in the world won't stop that.
It may be the winds and storm surge that do the damage in a hurricane, but if you hear that a hurricane with a central pressure of 880 mbar is coming for your coastal town, go hide inland for a while, and take anything you value with you. The industry is similar; it may not be what matters, but if they stop selling D&D, the hobby is ailing badly. If it starts to get hard to find dice, then the hobby is really in trouble.