Keldryn
Adventurer
I think that route was probably quite common: Neophyte picks up Basic D&D; finds other guys to play with, but the DM uses AD&D; so he switches and never moves on to Expert D&D.
Yes. Established gamers would most likely have already been playing AD&D, and it would be natural to just switch to what they are playing. The Basic -> Expert progression was building up a new population of gamers outside of established gaming circles.
Even by 1980 (when I started), the roots of D&D were irrelevant to millions of new players. We hadn't the faintest idea what Chainmail was, or why things were measured in inches. All we knew was that exploring dungeons and battling monsters was awesome.
This too. I started in 1986 (I was 12), and I had no idea what a wargame was, nor did I care. Exploring dungeons and battling monsters entirely our shared imagination was awesome, and we all wanted more.
We all eventually "moved on" to AD&D 1e because it had more classes, races, spells, monsters, and magic items. Without realizing it, we were essentially all still playing Basic/Expert D&D rules, just with the AD&D books as sourcebooks. We just ignored all of the weird and complicated stuff. It wasn't really until 2e that we completely left Basic/Expert behind. We did a lot of our gaming on our school lunch breaks every day, never once using minis or a grid. Any time a battle got complex, the DM just drew a quick sketch. This worked for D&D, this worked for AD&D, it worked for WEG Star Wars, it worked for various Palladium games, it worked for Star Frontiers, it worked for Warhammer FRPG, it worked for Paranoia, and it worked for various home-brewed systems too.
This is exactly my experience. I'm 10 sessions into a 4E Essentials campaign, and besides the one other guy who has read the rules, I still have to hand-hold the players through every combat. I'm enjoying the campaign (mainly because we only have 1 or 2 combats a session). But I think I would enjoy it a lot more with a dedicated group of players. I can player TSR D&D (and from the looks of it, 5E) with casual players. Not because they're more familiar with TSR D&D, but because they can simply describe what their characters do and let me handle the mechanics, far easier than is the case in 4E (or 3E).
I wasn't just hand-holding my 4e players during play. I would keep tweaking their characters to have more straightforward powers and I kept trying different ways of formatting and presenting their various abilities to make them easier to understand.
I've also never had any trouble introducing TSR D&D to casual players, for the same reasons you mentioned. 5e looks like it will be much closer to this than to either 3e or 4e.