The only mistake they are making is targeting a huge audience with little to no content outside of getting to cap level, then at endgame just 1 or 2 istances or raids and calling it a day.
Drawing a stick figure diagram in paint without doing any research or presenting sources does not make you right.
I disagree with the picture, becaue it assumes far, far too much that just isn't true.
First off - it assumes that FFXIV's base targets only non-dedicated members - where it's already proven that many players here have either defected from FFXI, or play both. This goes so much for WoW's base. As much as you would like to believe, WoW's player-base is not as stable as you would think. FFXI had a fluctuating player base as well, but imagine that fluctuating percentage on a scale about one hundred times the size of FFXI's flickering base. They're just as susceptible to finding a home in Eorza as anyone else.
Then there's FF fans - the ones that were dejected by FFXI, not just the ones that are members.
Also, note that none of the Eve Online, Linage 1 -2, and EverQuest hold overs are among the hardcore groups. But if you think for one instance that they are casual - you're dead wrong.
So no - inaccurate depiction is inaccurate. If anything, Hardcore players are more immovable from the games they've already been tapped to play, than the casuals, who can just as easily be converted to hardcore players if the game is right for them.
Create a game that has a wide appeal, and let the players sort out themselves who is hardcore and who is not - that distinction shifts depending on game to game.