The problem is - and let's be very clear, it's no fault of ICE - he is probably right in some way. A neglected product line tends to bleed customers because it's in the role description: customers buy things. If there's nothing to buy, they drift to something they can buy.
And I'm not sure anyone will be able to "keep the Shadow World line pure", so to speak. Let me take a purely theoretical example: I have been playing and GMIng in Shadow World before it was called that way (I started in '86 with the World of Vog Mur and Cloudlords of Tanara). I have bought almost every SW product I could, including a number I would probably have been better off not buying because of the lack of product line direction at the time.
Would I be helpful in developing the product line in a way that would satisfy the existing customers ? In all likelihood, absolutely not. And I think the answer is the same for everyone who could be considered for the job - not because they would do a bad job, but because people have their own Shadow World canon. Terry had authority because he was the original creator and owner - people deferred to his view because he was the author: you might have a different opinion, but it's *his* work, not *yours*. Shadow World was never the 'bring your own food' kind of setting the Forgotten Realms are (and even the FR had their share of problems with line continuity).
And now, it's directionless because the authority - literally - is gone. And there's nothing ICE can do to fix that. A new line director will not have authority until they imprint their own mark on the setting, making it their own - and alienating a part of the customer base in the process. And it will be a different Shadow World - the same name, but not the same thing.
So yes, in that way, Shadow World died with Terry. What is left is the dozens of SW headcanons that diverged from it at one point or another.
Now people might think I advocate putting SW to rest and starting fresh with something else. I do not, if only because the material is there and it would be a shame to let it go to waste. But It has to be engineered, designed, built and maintained differently, and the fact that it will not be the same Shadow World as it was 'before' should be fully supported as well. I have my own preferences in how it should be managed, but that's not my responsibility nor my burden to bear. I know that any new SW product I buy will be from a new line which might or might not be compatible with what was before. I also know that I might buy one and conclude that it's not for me anymore - it doesn't *owe* me anything, and I don't owe it anything either.
So he's right - people will leave, because it's unavoidable. And it shouldn't matter. What matters is that the *new* Shadow World, whatever it is and whenever it goes out, is something that is built to be globally consistent, and built to outlive the people who work on it. Whether it manages to retain the old customer base or not is peripheral (people will complain anyway).