Difference between Mattel and TSR is night and day. Mattel was publicly traded company since early 60's. TSR was, even at it's peak, smallish company. Mattel was also run by people that cared about making money. TSR, well, not so much.
They made so much stupid business mistakes, it's pure luck that they lasted as long as they did. First mover advantage helped them a lot. There isn't anything wrong per se if you wan't to cater to specific demographic, even nothing wrong if you want to be gatekeepy and make products that are unappealing to broader demographic. But with that, you pigeonhole your self into a niche and with that, you limit your company growth. Sooner or later, someone else will see that there is market that's interested in your type of product, but not in your product specifically. And that someone will fill gaps in the market you left. That's why in 90s, White Wolf kicked D&D from the throne. They appealed to broader audience, hence, bigger customer base.
When WoTC/Hasbro took over D&D what did they do? They started making products appealing to broader demographics. Gone was fantasy centerfold art aimed at horny guys. 3ed era is less sexy, less objectifying, less horny geek teen power fantasy ( be beefcake, get sexy princess). And with every iteration of products, they go more and more in that direction. Cause - money. If you want to make most amount money possible selling consumer products, you need largest possible consumer base. So you need products to appeal to almost anyone.