Yes, year-after-year growth is a good indication of a reasonable good game. Popularity is not. I'm glad we can agree on this.
As for people doing something that's less good that an alternative -- this happens all the time. It's a poor argument that people continue to do a thing means that thing is good. This is demonstrated throughout history. Does this mean D&D isn't good? Of course not, this argument in converse is poor as well. This is just pointing out that this argument -- that people continue to do a thing means that thing is good -- is a bad argument.
D&D is clearly a good game. It does what it aims to, and people enjoy it. However, it's a mistake to think that this is the reason for it's popularity -- it's a contributing factor, sure, but this is neither a major reason (there are plenty of games as good as D&D) nor is it axiomatic (things that are popular aren't necessarily good -- I mean, come on, does no one remember high school?). Extrapolating the quality of D&D from it's popularity is bad logic, and a bad argument. Looking at what D&D does well and other factors (timing, inertia, legacy, etc) to explain its popularity is the right direction.
I'm currently running 5e. I ran 4e. I ran 3.xe. I ran 2e. I played 1e. I clearly don't have any issues whatsoever with D&D as a game, and I'm aware of enough other games (that I like to love) that I'm not continuing to play D&D because of personal inertia. I do play D&D in part because of group inertia -- my group has a significant investment in D&D and peripheral products and we'd like to see a return on that investment. That D&D provides that return is, in part, why we keep playing (ie, not a sunk cost argument, D&D provides actual return on investment). That and we like it well enough. It's also easy to find those peripherals for -- roll20 has good support for 5e (we're virtual due to consistent exposure risk for a number of my players and myself -- we have jobs that put us at risk), there's cool dice and minis, and lots of adventure ideas not to mention full APs (if that's your thing). So, the economy around 5e supports playing it -- it has built up a strong support network with tools, toys, and advice (youtube, streaming, here). Honestly, I like 5e for the combat -- it scratches my wargame itch. The exploration and social pillars I find to be far better supported in other games (which is why I play those games when I want that focus). This is fine, and you should play games because they offer something. Someone else may have a different attraction.
However, I find threads like this to be extremely fraught for two main reasons -- 1) most posting do not have a depth of played games that stretches far past D&D. Many that claim different games played are still within the scope of D&D-like. Even CoC is largely D&Dish, in that the way it structures roles in the game and establishes play is familiar to someone that's played D&D -- the GM is in charge of everything but the characters (and that's not strong). The game runs by the GM establishing the fiction. This is a great way to play, by the way, I'm not knocking it (and it would be hypocritical to do so, considering I'm running a 5e AP right now). But, it severely limits the understanding that there are actually very different ways RPGs can work, and that those do things D&D just flat out cannot do. In turn, those games can't do things D&D can do. But, this lack of breadth in experience lends to a certain myopic point of view on just how flexible D&D can be -- which is that so long as it's trying to play the same way as D&D, you can file off the setting and swap a few things out and pretend you're actually playing a different game.
The second thing is that people are strangely extremely personally invested in D&D such that any suggestion that the game doesn't do something well, or isn't as flexible as claimed, or that another game might do something better is immediately met with defensive posting, usually assuming insults. It makes it very hard to say, "D&D is a good game, but if you want to do X in your game, you should at least look at how Game Y does it, because it does it very well and D&D has nothing for that." The corollary to this is that people will often say D&D can do those things to, but ignore the fact that you're either dropping D&D and falling into ad hoc GM fiat territory or you're building entire new sub-sections of rules. Or, which is actually most common, it's assumed that this is so because you can do either of the above, but no effort is made to actually examine the level of effort or effect for doing so. As someone that used to do the Fantasy Heartbreaker level of houserules to achieve things, this rings entirely hollow for me these days, especially now that I actually have a better grasp on the breadth of games out there and how they achieve things. You cannot, for instance, replicate the majority of play in BitD in a D&D game -- you'd have to rewrite so much of D&D to do so that you'd essentially just recreate BitD.
