The current edition seems to appeal to a much smaller group of people than the older ones did, but its a group that is more likely to buy items associated with the hobby. We D&D players are currently an extremely small, closed, and dying sub-culture.
That's a little more pessimistic than I'd describe it; I don't think we're dying just yet.
Still, we do suffer tremendously from one thing: The casual gamers have moved on to hobbies which demand less personal investment. First CCGs and then MMOs provided new options for people who didn't have time for RPGs, or didn't have a gaming group, or simply didn't want to put in the up-front investment of time and energy to master the rules.
(Please note that I am
not saying CCGs and MMOs are "dumbed down" compared to RPGs, or only suitable for casual gamers, or anything else along those lines; they simply have lower barriers to entry and require less of a commitment, making them more casual-friendly.)
And because the casual gamers have, by and large, moved on, we are left with the die-hard gamers who are willing to make big investments. What this means is that a modern RPG has two options. It can try to reach out to people outside the hobby and open up a new market. Or it can appeal to the hardcore gamers, trying to snare a small number of high-spending customers. The latter approach is easier and safer; but it also leads to a vicious cycle and an ever-narrowing player base.
D&D 4E is trying to have it both ways. The rules are simplified and streamlined in order to bring in new blood. At the same time, a dramatic increase in the percentage of "crunch," heavy reliance on miniatures, and a modular ruleset allowing for the release of endless "list o' powers" sourcebooks, target the hardcore gamer who will shell out the big bucks.
It remains to be seen whether this hybrid approach will work. I confess to being a bit skeptical, myself. 4E is certainly bringing in
some new blood, but I don't see it making the kind of conceptual leap forward that opens up new markets.