Yeah, the idea that there's no money in RPGs is clearly wrong. Even setting aside D&D (which, to judge by WotC's recent behavior, is making money hand over fist), the industry supports a number of companies with full-time employees. I mean, since we're talking Paizo: Their pay may be pretty low, but they still employ about 80 FTEs. That's a hefty payroll. And apparently they had enough spare cash floating around to chase the MMO dream for a while--which is a whole lot of spare cash; the table stakes to even start to build an MMO are enormous.
Now, what is true is that the ratio of "money in RPGs" to "people who would like to make money in RPGs" is pretty damn small. As with most such markets, you see a modest number of people who are able to turn a profit, and a handful of people who are able to make it a full-time job, and a whole lot of people who try and fail to do either.