1: You are assuming I am the only one who may do this.
No, I'm not. I am assuming that anyone not buying more WotC D&D materials is still someone who has potentially bought
some, like the Player's Handbook, Dungeon Master's Guide, or Monster Manual, and that each new person you play with will form their own opinion on what to buy rather than simply parrot yours.
2: You assume I play, and the people I game with, play with other groups and/or look for new gaming groups to introduce the game to. We have already made our one time purchase of the corerules and I can promise you that D&D wouldn't survive on just that if loads of other people did that as well.
Yes, I assume that people partaking of a social game occasionally socialize that game with new people... if that is a bad assumption, call me hopeful and leave it at that. As for D&D surviving - you realize there is a reason that WotC is focusing on D&D as a
brand rather than just as a table-top game, right? Video Game does well? D&D does well. Movie makes some cash? D&D made some cash. Someone, somewhere, is playing D&D? D&D survives.
3: You assume that all Wizard's wants is for everyone just to play their game so they can high five each other and call it a day.
No, I don't.
I assume that their business plan doesn't rely on constant flow of cash generated by table-top game components alone, because it obviously doesn't given they aren't just pumping out books for people to buy.
4: If we are getting interested in Primeval Thule then why would anyone in the group start buying Wizard's products when we are playing in a world where much of it may not apply?
What you have just said, if true, would have meant that 3PP products for 3.5 would not have been successful for anyone because "Official products only" and "Core only" were two very common limitations I saw applied to people's campaigns.
"Hey guys let's run Primeval Thule." "Sounds good, I'm going to go and pick up Out of the Abyss." That makes no sense at all.
You say it doesn't make sense, but I could actually find you a link if I cared to try (I don't, as I have nothing to prove to you) of a map of this one dude's campaign world which is actually Primeval Thule + Eberron + Forgotten Realms + Mystara + Golarion + probably others I can't remember, all arranged into a single game world by treating each different game world as just a different cluster of countries/continents on the same planet.
Gamers constantly adapt one thing to another thing, just to get those things they happen to have catch their eye into the game they like playing. So it's not "we're in Thule? Sweet, I'll grab Out of the Abyss!" but rather "Hey, cave crawling and demon cults trying to bring big nasty demons into the world? Sounds cool. I'm gonna adapt that to Primeval Thule."
Bottom line is, unless we are paying Wizards each time we use their rules, they would not benefit whatsoever if we went to another company for all of our gaming needs.
Evidence strongly suggests otherwise... as do the actions of WotC in bringing other companies into the mix intentionally. If they wanted you buying WotC and nothing else, they wouldn't be even remotely accepting of outside license.
No, they just want as many people to play D&D of some kind so that D&D has as much buzz as possible so that other D&D brand endeavors have the greatest possible chance of success - even if that means some folks don't buy anything but the basics from WotC and get all their adventures and campaign setting materials elsewhere.