Now if you are thinking, "Who needs those players anyway," according to Blizzard's old numbers where ~60% participate in LFR but only 10% participate in normal/heroic raiding; that would be a pretty big blow to their sub numbers...especially since Blizzard believes that these players would not move on to raiding at a higher difficulty level but would rather quit.
There have been some decent arguments made that Flex could replace LFR. However, I don't think a decent argument can be made that Flex raiding could replace adding new heroic 5 mans.
In my ideal world, Blizzard would switch to making the two new 5 mans each raid wing and LFR would be released as a raid-tier-behind thing that awarded the old normal-mode raid gear. When you think about the implications of this, it would result in a lot more content at any given moment for both raiders and non-raiders. Regardless, I understand why Blizzard is doing things the way they are doing them.