This, unfortunately, is not the issue. TRPGs, including D&D, have been bleeding consumers for years now. It really doesn't matter how well the game is designed, how pretty it is or how much fun it is to play if, in the end, it is just another TRPG. In the long run, after the intial boost of the core books, the player attrition problem will have the same impact on 4E as it did on 3E and 3.5 and the choice will be yet another edition, or to do something different. I think theya re trying to skop that step and want to do something different right now, hence the importance of D&DI to the overall measure of success for 4E.
Traditional, table top RPGs are an outmoded form of entertainment, no matter how much we (you know, that insignificant minority that hangs out on message boards) may love them and vow to be playing in the old folks home. While it may have once been true that RPGs provide the best value for our entertainment dollar, it isn't any more. Sure, you have to play a monthly fee to play WoW, but with 22 hours a week being the average people play WoW, that $14.95 per month amounts to a hell of a value (dollar to hours wise). In addition, there are lots of games that don't require a subscription that still give lots of playability (FPSes and RTSes with lots of mods spring to mind) or online services that are even cheaper than WoW that allow for lots of different entertainment options (XBox Live, frex). And the cost of the hardware doesn't really count the way it used to, as most homes have computers in them now and most games a fully playable on the run of the mill, off the shelf machine.
So, while I do not agree with the OP that D&D is dead (yet) or that WotC is intentionally trying to kill D&D (man, what?), I do think that 4E and its associated online components do represent a paradigm shift for the game and the industry. D&D doesn't have to be or beat WoW, but it needs to be able to offer comperable entertainment value per dollar. And the elements that limit that value are all things inherent in TRPGs as a whole: scheduling being a big one, and the fact that it often comes down to prep vs purchase, either choice reducing the overall value. Plus, there's the big hurdle, and the thing that makes an RPG an RPG -- the presence of the GM, the inherent inequality of expense of both effort and money by one of 5 or 6 participants. I don't think 4E will alter or eliminate all of these, but I think it and the D&DI will lay the groundwork for eliminating or severly altering them in the near future.