Hockey is growing slowly in the US, I've never denied it, and I agree fully, although I'd like to see registration numbers for every year over the last 20. In fact, I played against a lot of American teams growing up, so I've seen it first hand. But of the 500,000 kids signed up in hockey in the US the vast (very vast) majority are in the north east. In the US, Dallas and LA have had a bit of growth (particularly Dallas), but I would bet the number of players in either of these places would rival any minor hockey organization in the OMHA, ODHA, or GTHL. We're talking cities of millions having the same numbers as cities one-tenth the size.
Also, the number of registered players does not equal the total number of participants and fans. Most adults aren't registered. There's also nothing to suggest that simply because a kid is in hockey that his parents are hockey fans. Parents control the money in the house and they decide whether to go to an NHL game. I played with many people whose parents never played the game and beyond what their kid was doing, couldn't care less about hockey. So that's not an accurate stat whatsoever.
You're quick to say that Balsillie and his team would fail. Why would they fail? He's committed to putting a winning team on the ice, he's said it himself that his goal is to get his name on the Stanley Cup. if he got Phoenix or any other team I'm sure he would do everything possible to bring the best players to the team. If you have an owner that is committed to winning (so essentially, the anti-thesis to the Leafs) the crowds will be there. If it was the Coyotes that he brought to Hamilton, they have a really young and talented core of players with a lot of potential, that would be very attractive to any hockey fan.
it's not a fad. This is Balsillie's third kick at the can, and eventually he will get his team. Phoenix is just the tip of the iceberg. Nashville, Dallas, Tampa, Atlanta and Florida are in some sort of financial peril. It's bound to happen.
I agree Seattle would be a good market for a team. They support their Junior hockey really well, and could have some potential there.
Finally, umm did you read that article from USAhockey that you quoted? The USA does not create many elite hockey players. Go to any elite AAA minor hockey tournament and you're bound to see Detroit Little Caesars, Compuware and Honeybaked, Chicago Young Americans, Team Illinois and then the rest will be Canadian teams from places like Welland, Peterborough and London, and teams like the Toronto Marlboros and Red Wings. The fact is American clubs can take players from anywhere within a 100mi area, whereas Canadian teams can only take players from within their boundaries. The fact that Canadian teams compete at this level with American teams with population bases that are sometimes 50-100 times bigger is a testament to the quality of hockey played in Canada. The US will never have the quality and depth that we have. They might win a World Cup here and a World Juniors there, but it will be a blip.