First of all, you make a very good point by using 'our' auto industry as an example. Unfortunately, it wasn't the point you were trying for. The US auto industry indeed made a mess of things and very nearly went out of business. But they have come along way back. You ask, "Where is it?" - the answer is it's in good shape and getting better every day, back to making money and more cars. The proof is in the sales and earnings data.
Dan Phariss is well respected in our community; his knowledge and experience are valuable and highly regarded. But I see no credentials that make him, or the friend he references, a seer with respect to the business of black powder production and sales. His friend's prediction is hardly validated by Hodgdon/Goex closing down one product line while introducing another. Dozens of products are canceled and new ones introduced every year; it's a normal part of the business cycle. Further, there's no data supporting the claim that "sporting black powder barely pays its way" or that the profit margin in real black powder is "far lower than P-dex." Dan may well be right, but he presents nothing to support his assertions, so I have to discount their value as facts; they're simply opinions, which he has a right to express, and I have a right to disagree with.
You obviously have not been to business school lately. They do teach improving bottom line performance by cost reduction, but there's much more emphasis on learning what your market needs and wants and figuring out away to get it to them. No business that puts it's customer last survives - your example of the US auto industry is one very good example. I can't be to critical of your attitude toward business these days as the only press we get (how can anyone believe anything they get from today's media?) is negative, but there are far more examples of M&A activity being positive for both companies than 'destroying' the acquired company. You just don't hear about them. I can't say it doesn't happen, but its certainly not the norm.
I'm not saying Hodgdon is any kind of a saint, or even that Goex will never stop making black powder. I'm just saying that I have not yet seen evidence that the dire predictions of the imminent demise of Goex, or black powder sports in general, are even remotely accurate.