I don't know why you're saying they don't comprehend it. The feeling I got from the article is that the playerbase is.. lazy? Spoiled? Unwilling to put enough effort into lfr? Blizzard isn't stupid. If we know what the playerbase is like, there's a good chance Blizzard knows it as well. It's just that they can't do all that much about it.
I feel your second sentence is accurate, but I'm not sure about 'fail utterly.' I would say it will be very rough going until people get used to lfr and what it takes to succeed in it. That is, if the playerbase even has the patience to adapt to what it takes to succeed in it.
The problem is the playerbase, not lfr itself (although the imperfect need+ system with regards to bears IS a problem.)

IMO, it's not that Blizzard doesn't understand the problem, its that they are sick to death of people whining for a raid finder similar to the RDF. People asked, they're giving them exactly what they asked for. Shame on them for not understanding what they'd get with the player base.