Yep, WotC saw an issue. Non-FR players had an issue regarding the overabundance of material and Canon experts. They felt the entry cost was too high, etc., so why bother. And WotC's response was to blow the whole place up.
They wanted Realms gamers to grow in number (and buy stuff), so they went after most of the sacred cows--Mystra, Elminster, the Seven Sisters (among other uber-beings sucking the collective air from the room)--and then went beyond. 4E was the perfect excuse. But the calculation of gaining new people vs. losing old timers was a fine one.
Perception is Reality, as they say. So they got a few new fans but the net loss was greater.
To me it's like a rock-country band who's at saturation point with those who like the rock side but they see some room for those who prefer country. So their next album goes full-hillbilly, they get some more country fans but the rest don't bite since they never considered the band to be 'true country'. Meanwhile, those on the rock side are put off and stop showing up. (Think Alan Thicke's "Paula" album in terms of sales tanking.)
Now the band's back, they got rid of the banjos and plan on NOT playing anything from the last album, more or less.
Oh well, 4E Realms served its purpose. Those who like the idea of the Realms but hate the canon can start with 4E version, those who didn't can ignore it.
Hmm, I forget. What was the question or point?

My bad.
OK, back to the other point--yes, a problem with the Realms is that for those fans the published Realms is
their Realms. So with a DM who makes a lot of changes it's as if someone went and repainted their favorite sports car. Yeah they'll walk out whereas if faced with a campaign setting their unfamiliar there's no such baggage.