Raid content has always been released regardless of this, because its the pinacle of the game. In fact, the best raids (quality) were designed when few people raided (AQ, Ulduar etc).
I understand the nature of your argument, but its just plain not true. Also, remember that casual players sub in and out. The players who raid heroic, have three accounts each are the ones making money for Blizzard. Its not the expac subbers. (read: the 20/80 rule). Its the same on poker sites: 80% of the money is made from the 20% top players. But lets overlook that, because neither you or i have numbers about the sources of revenue. Just speculation + theory.
Re : removing raids and adding levelling zones : Soooo no end game content? you level to 90 and nothing ? Sounds fun. Alt grindest forever? no thanks. You do realise most people hate levelling, and only do it for end game content ? (read: decline of alts with rep grinds, blizz having to increase XP by 30% to encourage alts etc)
Flexi, as a functionality, looks promising if its not gamable.
Flexi, as a difficulty, is just catering to people who do not want to put any sort of effort in at all, but think they are better than the LFR crowd. Which is the exact mentality the LFR crowd has. Strange ey ?
Its a slippery slope. If its too hard, people are gonna ask for another difficulty level, until we have a slider bar from one to ten at the start of each raid.