"With every knowledgable vet that says 'fuck this, I'm out' we lose out on vast amounts of game knowledge that never comes back because new people don't know all the nuances of how a MUD works. It's a self depricating cycle that ends with the MUD fading into memory. "

This is probably true and as long as rate of exodus out of game > influx into game we'll continue to see a shrinking playerbase. In business they say that getting new customers is about 5 times more effort than retaining existing customers. In CF's case that is more like 20 to 40 times for existing MUD players and over 100 times for people who have never played a text based game.