So if my rebuttals are so bad, then come up with some other reason why horizontal progression doesn't limit growth of the game.
Another statement: You can add in new weapons/armor that doesn't negate the existing.
Rebuttal: If you add in new weapons that are better, you just negated the old content anyways, and if you add in something that isn't better. Then why even get it? Your limited on inventory spaces anyways... With vertical progression, you will need these new weapons and armors, new recipes, new gathering locations/materials.
The problem with horizontal progression, is you are limiting the game to potential growth. Horizontal can only go so wide before it must go vertical. If you wait too long to go vertical, you lose all the players who don't like to repeat the same content 1000 times, and then you lose all the people who did and feel like they accomplished something by having +1 STR items over everyone else. If you do the merit system like FFXI, you are negating old content anyways, its another form of vertical progression, except the fact that now those old Rank 75 things are now super easy because of those merits.
People who had level 100 crafting after 1 year of the game, still had level 100 crafting after 7 years of the game. They were done crafting. With vertical progression, you can keep all players growing.
Here is an idea on how to keep older content relative... make existing weapons/armors upgradable by new and existing items. Capped areas, and update the existing content with new expansions (rank increases).
So list out all the pro's and con's for horizontal progression, and guaranteed that vertical progression pro's and con's will outweigh everything horizontal does (from a business perspective)