It's not really killing the game, but you're correct that the dedicated players who moved on from WoW aren't being replaced by newly dedicated players, because LFR doesn't provide incentive for that. Instead, they're replaced by players who just do easy content and get burnt out after they've consumed it all, and that's not really the player's fault because new players who started after Cata are going to take the path of least resistance. Heck, even old players take the path of least resistance. Ultimately, this hurts Blizzard's sub numbers, but they'll brush it off as "oh the players have changed", "oh the game is just old", etc...
Player psychology hasn't changed, the game is just no longer creating the types of players who become hooked on the game, and instead creates non-committal players. I see no reason to dedicate oneself to WoW nowadays.