The problem with LFR is largely that for a large majority of players they can see the content with a very very very small amount of effort required so because of that they never feel the need to actually learn about the fights, mechanics, their class, or about raiding in general. It ends up spoiling the pool of possible raiders to draw from as more and more people quit the game. There aren't very many people getting into raiding anymore and why should they when they can see the content without very having to really try to do anything.
Raiding and the gear it offered was a big reward for putting real time and effort into the game now they hand out everything like anyone who has ever made a character is entitled to be able to have a mythic raiding item level without putting any real effort into it. The legendarys being random drops in Legion is one of the dumbest things that blizzard has ever decided to do.
The reward of actually doing high end rating is so low now the raiding population is dying because of it. You are seeing some of the major progression guilds quit because theres nothing worth it anymore and most are moving on to better games and those who still want to get mythic archimonde down like myself and my guild are having massive problems recruiting because its in between expansions and there is very few people actually trying to get into raiding now and even if there is most are so far behind on the legendary questline that they can be the best player in the entire fucking world but if they don't have that ring they can't keep up and unless you want to spend 5 or more hours a week grinding out mythic dungeons for VP its just not easy to catch up.
If you were a major fan of Warcraft and you wanted to see how the story of Arthas or Illidan ended you had to actually do a real raid to see that content, that was part of your reward for working through those raids and committing your time to the game. Now you want to kill Archimonde one of the biggest badasses to ever appear in the Warcraft universe its just a queue away, there is no challenge, no effort needed, just a few clicks and bam you are there right at his feet and he'll give you epic gear for the next to no effort you put into it.
When LFR was introduced what I wanted it to be was a way to actually allow players who were not familiar with raiding to learn about raiding and hopefully get into it because of it, but the LFR crowd just wined over and over again about the bosses not being faceroll enough and now they are literally faceroll and we are all worse off for it.
Guilds are quitting because there's no content, not because of LFR :lol
The vast majority of people that do LFR-only (aside from doing it for legendary quest progression, which is going away in Legion) wouldn't start raiding if LFR disappeared.
It also doesn't make much sense for Blizzard to spend time, money, and other resources on content (raid zones, encounter design, item models/design) that most of the population will never see.