Is popular the enemy of good?

A frequent commenter on this blog, Toxic, is currently filling whole comment sections here with rants about how Ulduar is too easy, and how Blizzard is debasing WoW to make it more popular, get more subscribers, and hold them longer. So before that discussion fills more barely related threads, I'm dedicating a thread to it.

I fully agree that Blizzard made World of Warcraft a lot easier than it was during the Burning Crusade era. I also agree that they are doing it to make WoW more popular, and that the changes are designed to please a larger percentage of WoW players, who during the BC era didn't get anywhere and then quit the game. Making raiding more accessible makes WoW more popular, because a larger part of the player base is involved in the endgame, and thus Blizzard's profit go up.

The point I can't understand is some people saying that this is a bad thing. Isn't this a win-win situation? More money for Blizzard, more fun for a larger percentage of players. The only ones hurt by this change is a small percentage of elitist hardcore players, for who the game on normal mode is "too easy", and who hate to see all that riffraff at the meeting stone when they go raiding. But sorry, not having content exclusive for a small group is an improvement of WoW, not debasing it.

Furthermore with this patch Blizzard created a lot more content for the hardcore. The bosses in Ulduar have hard modes. The final hard mode boss, who is not available for normal mode, Algalon can only be attempted 1 hour per week. How is that for a real test of skill? Yes, it would be nice if there were even harder raid dungeon available, but that is a problem of this expansion having much fewer raid dungeons than the previous expansion, not that they are too easy. For the majority of players Ulduar has exactly the right difficulty level, challenging, doable, but no pushover. It would have been easy for Blizzard to create bosses nobody can beat, but that would have been plain dumb. Why spend development money on content few people are ever going to see?