I don't think the reasons you've pinpointed in the OP are the reasons why WoW hit a rut, it sort of ignores various other problems and extenuating circumstances that fed into why there was a massive downturn. Guess, though, it could play a part with the extreme ends of LFR (and apparently the new normal raid is particularly difficult for that tier or something? I don't know the details).
Though, I will say that I do agree with it otherwise. Content is, ultimately, designed to be beaten and overcome and even the easier content should -- at least -- feel rewarding, fun and fulfilling to succeed in. I don't think content needs to be difficult/for the bleeding edge since, generally speaking, it puts most people off ever trying that content (especially when people tend to overhype difficulty tiers to boost their own egos) and then the pool of people doing said content continually shrinks. In the same vein, I don't think content you can afk in and win in is, necessarily, a good design path. Some of the bosses, in XIV in particular, that people talk about the most aside from early Alexander floors; tend to be bosses that aren't particularly complex in their execution, but feel good to execute and feel good to perform on and feel fun to fight (ie: God Kefka, Titan Savage, can even throw in Titan Extreme, Halicarnassus, Neo-Exdeath -- personal ones /I/ liked I consider on the easier Savage spectrum would be Guardian, Hippokampos, Chaos, O11S, Cloud of Darkness).
I do think difficulty can be fun, but I also think "fun" and "difficult" are not synonymous terms. Ultimate, as it stands, is a lot more accessible (in terms of difficulty) than I feel people give it credit for (a lot of it tends to be in time committed to an Ultimate group), but I do think it's a tier of difficulty that's often over-valued by people. If you can beat savage, imo, you can beat an ultimate fight (the extremes of "blind prog" and "world prog" not included, since I feel for blind you'd either need the patience of a literal God, or be a lot more well-versed in the styles of mechanics + their presentations in the game: ie: more experience than 1 savage tier).
And, I think, a lot of people who say they want more difficulty (*harder than the Ultimate experience canprovide) are generally people who don't do those pieces of content (but say they do), or are people who do those pieces of content and want to look like they're the best player in the room when no one knows who they are. (Not to say I don't think there's a very small minority of people who do, genuinely, want content at such an extreme level of difficulty because /that/ is what they find fun -- but that is, realistically, not the majority of players nor the majority of players who often crow about the topic and, to a degree, it's an unrealistic expectation).
I kind of feel, for a lot of people on the topic of difficulty, it's a pride thing. "Which game is harder? WoW? XIV? Lost Ark?" and then you get the sea of emotional knee jerk reactions because, whichever one someone claims to be hardest, the other two are being called "easy" which hurts a lot of gamer egos. Even the same in the XIV community, purely internally -- "___ Job is easy" will get people riled up a lot of the time. Or people who over-analyze or over-care about how someone else clears an Ultimate (Dyrus, Rich for examples).
I do think, generally, closer to the two edges of middle-of-the-road (which, is largely what I consider midcore since everyone kind of has a different definition), is healthier. Savage being fun to play, rewarding to win, and a good time to re-play (reclears/Party Finder) is a good thing (and, for this tier, I enjoyed PFing 1/2/4 -- I stopped reclearing mostly because of P3S reclears. I love that fight, but it utterly annihilates Party Finder and the hassle of dealing with the set up, the constant impatient people who're wiping the party anyway, etc... and sitting for /hours/ in a P4S party is... yeah I started playing Lost Ark and Elden Ring instead LOL).