I agree with your assessment. And for clarity, never had an issue with the community, certainly a hard working dedicated group that I did learn a lot of HL code from. Like you, LW just made some poor decisions at the top of a small company that may (hopefully not) prove fatal.
I always personally felt the two fatal errors were not recognizing the "so called user poll" was inflated by players, when Realm Works REQUIRED support of the DMs. Without DMs utilizing the tool it didn't matter if player bought the "player's version" thank the gods it was only $6. The other error was not opening up the content market to creative community dwellers first to help work out the kinks BEFORE trying to convince Paizo, Kobold Press, Frog God, etc into a partnership sign on. I have had conversations with people on all sides. The IP security was never really resolved to the publishers satisfaction. LW could have generated some cash flow for posting independants' realms, modules, etc and also gained a bit for each download as well. Granted, it would not be the $ they could get from a Hazbro/WoC or Paizo relationship, but its a start and certainly beats nothing coming in except a fee for storage that came years later than planned and at the point now of little relevance unless you just want a sort of sudo cloud to back up your data on.
Thanks for the warm welcome! And its good to see a familiar face.
DLG