I agree for the most part, I think, but I don't see how a crap adventure would stop people from buying a good adventure. No one stops buying novels because they bought a bad novel. You can pretty much say there is a continuous glut of bad novels in the book industry, yet people still buy novels and read them all the time. Just go to the book section of a Wal-mart. I would consider most of that crap, or at least stuff I would never buy or read, but they are still made, printed, and some people must buy them sometimes. So I don't think that having a glut of material, even if a lot of is bad, would stop people from buying. I think it's another reason.
I've certainly stopped buying during glut times. In the early AD&D days, I could pick up a TSR adventure and be pretty sure it would good (T1, B1-4, G-series, D-series, S-series, C-series, A-series). Hardly any duds in the bunch. By around 1985, they were churning out a lot of crap. Rahasia was the last TSR module I bought for many years. I had hit a point where a module I bought was likely to be so bad I wouldn't run it.
Same thing with the 3e glut. I never did like the WotC adventures, but Necromancer Games hit the ground running with Crucible of Freya, Tomb of Abysthor, and Rappan Athuk. Then they started to turn out larger volumes of crap. Once bitten, twice shy. I picked up a couple adventures by other third-party publishers and they were terrible. Figured Goodman Games' DCC would be a good fit; nope. Mediocre at best. Filler. With two DCCs on my shelf that I will never use, there's not much chance of me risking a third.
Now compare that with Paizo. Before an adventure is even released they have teasers. Threads that the publishers post to outline the adventure and its tone. At release you get reviews, user comments, ratings, and session reports. The adventure paths themselves have a huge amount of material out there - reviews and GM tips, support material. You can easily do 2-3 hours of research on an adventure path before taking the plunge.
Whatever the problems with the railroaded format, and the cheesy setting, you know with Paizo you'll be getting top-notch layout, maps, and production values. They tend to attract the best freelance writers in the industry, and adventure path chapters are reserved for the ones who have proven themselves. This is all because they keep a strict limit on how many adventures and AP chapters they turn out a year. That means quality control.
Since the third-party modules for Pathfinder are sparse on the ground, someone picking up a Pathfinder adventure or setting book has a very good chance of buying a very good product. The quality is consistent enough that their bread and butter is subscriptions. You wouldn't have that many people buying books sight-unseen if the adventures were of dubious quality.