I generally agree; while piracy is a problem for the comics industry (or the film industry, music industry, etc), scapegoating it as the sole cause for the medium's decline is silly.

For my money, digital is the future. Sure, there will always be those old-school nerds who just have to have their hands on the bona-fide, poly-bagged real thing, but digital comics have the potential to be so much more convenient. What the publishers need to do on the digital front is make sure they have a smooth-running reader program across all platforms (pc, tablet, mobile, etc), fully-archived back issues, and a competitive pricing model.

Does the brick-and-mortar comics shop lose out in this future? Possibly. But you know what, comics shops didn't exist when comics started, and comics won't necessarily disappear if comics shops do. Besides, from the publisher's point of view, the comics store is a barrier to entry for potential customers. Plenty of people don't live near a comic book store. Or maybe the only one nearby just isn't a good one; the comics shop experience is not controlled by the publishers, so a comics virgin could walk into a bad store and be turned off to the industry through no fault of the publishers or creators. Direct access to consumers through app stores or what have you, at the expense of the brick-and-mortar middlemen, is the best way for publishers to stay in the black.

We of the community of hard-core comics fans may decry the change, but think about it ... do people watch fewer movies now because there are fewer Blockbusters and the like? Comics can thrive in the future, the publishers just need to embrace the changes and not hold on to the past.

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I would like to see research that shows the decline of comic revenue with the increase of cover prices...

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True; we hear the issue raised, but of course it's hard to verify. It could very well be a situation like with Major League Baseball (or the NFL, NBA, etc) where the owners bemoan that they need to cut costs because it's just such a darned tough economy don't you know, and poor little old they aren't making any money don't you know. All the while they're selling out 30,000 seat stadiums 60 times a year at 20 bucks plus a pop, plus concessions and advertising etc etc etc. Unless the owners are eating diamonds for breakfast and fueling their Maseratis with $100 bills (which may be happening), they're doing all right.
It's just often in a business' interest to make it seem like they're limping along so people will go along with their cost cutting and price hiking.

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I know part of the problem is the distribution model they use. I don't know the specifics, but have been told by people in the industry that the way deals are set up for Diamond to distribute comics is insane.

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That's because Diamond is the only distributor, thus controlling the market. I read somewhere, can't remember where, that Marvel starting their own distribution company and it failing miserably set up Diamond to take control of the market.

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I read an article at some point that talked about how Diamond is basically immune to anti-trust litigation because of a loophole. Apparently, though they have a stranglehold on comic book distribution, since they don't have a monopoly on book distribution in general, they can get away with whatever they want.

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