The missing point in this discussion is modes of travel in Second Life. The ability to teleport anywhere on the grid instantly (hopefully) obviates the need for population density to accomplish things.

My shop does just fine, though when I stop in, I might find 1 or 2 people at most. But over the 24 hour period, I get a good amount of traffic in dribs and drabs.

With a good search engine (with has improved), a great community blogging about great locations, and tp ability, I don't need to live in a population center.

This whole argument is like saying that a website is dead because when I visit, there are only 2 other people viewing it.