Cataclysm killed my guild's 25 man raid that had been together from late Vanilla. We were semi-casual, with two 3 hour raids per week, with somewhat unpredictable attendance. In other words, probably a pretty typical 25, excluding the 10% of hardcore raiders. We had managed to clear every previous tier of content. Not nearly as fast as some guilds, but we always progressed steadily and eventually got there.

Cata was just too hard, and precisely for the unforgiving mechanics described above. In my experience, you have to assume that 1-2 players in a 25 will have something go wrong in each attempt -- DC, angry spouse, frozen screen, what have you. Another 1-2 will have a brain fart and stand where they shouldn't. We've all done it, lots. So I agree that there has to be some room for error built into each encounter.

Over and over, we had people stop raiding because they were finding it stressful. Players felt that if they screwed up once, or DCed, or whatever, the attempt would fail because of them. So when we began to get stonewalled, the pressure mounted, and players simply stopped showing up.

I agree that part of the fun of raiding is the challenge, but it has to be a manageable challenge. Insta-gib mechanics, where one error or untimely technical problem will doom the attempt, aren't fun. They just make the game stressful. And I get enough stress at work.