That is not entirely the fault of LFR or LFG but a natural progression of a game that has existed over 10 years. I am not saying that they are not partially to blame but peoples lives change, I was 18 when wow was released and 21 when TBC came out, I raided a lot then and through WoTLK but come Cata and MOP I had no time at all to do it due to time commitments. The implementation of LFR means they can keep the player base interested.
What it ultimately boils down to is that the majority of the player base are not hardcore gamers with hours and hours to spend but the casual gamer that has perhaps an hour or two a night or a few hours at the weekend to play and have to cater to those. Both methods of raiding\Grouping\Guilding are still available it just takes more effort to do the old style than the newer ones.
Yes it is a game, but it is business driven. I firmly believe without these things being implemented they would have lost a large portion of their player base and WoW would no longer be viable for them or it would in a drastically scaled back version of what it currently is.