No. And I'll say it again - no.
Firstly, if you advertise it as a "driving simulator" you'll get even more cruisers than we already have. And the people who come on to cruise are the same people who will then end up complaining that there's no free-roaming option.
Also, you'll get people who want to learn to drive, then leaving disappointed because it doesn't really work. It might in the future with the right kit, but it doesn't.
LFS is designed for racing. That's why it has "race" tracks. That's why it has "race" cars. The fact that people have decided to mod it to allow different things is merely an example of how good and how diverse the current software is. It's also a decent example of how creative the current playerbase is.
If you ask me there's a couple of reasons the playerbase is declining. Or at least failing to incline noticably.
First thing is the graphics. Personally I have no problem with them, but if you compare it to other games claiming to be sims (Forza 2, GT5) about to come out, it's not great. With the mods and stuff it can look great, but that isn't default and the kind of person who'll do it isn't the type of player this thread is talking about.
Secondly is real content. If it wasn't a big deal we wouldn't have so many threads about it. I couldn't give a crap about them, but people do. I'll never know what it's like to drive an Enzo round Laguna Seca so an accurate sim seems a little pointless, but apparently there's plenty of people who want to do it.
Thirdly is the number of rival products there are now. Back in 2000 there weren't that many "sims" around. Certainly not a great selection of tintop sims. GTL came along and got it's base, and NASCAR 2k3 was a bit later. Over the years more and more coem out and cater for different kinds of people. You lose the people from my second point immediately to stuff like RACE or GTL. In terms of core "simulation" they're lacking against LFS, but in terms of graphics and real stuff they will win. Names sell stuff, it's a well-known fact.
So this is where I think it's a good thing.
The more people who leave to chase after real-life content that feels fake, the more dedicated hardcore fans LFS has with it's real-feeling fake content. Personally I don't care whether the tarmac I'm on is in Aston or Silverstone - it's grey and I'm throwing the car around at 120mph. How much chance do you get to notice the scenery?
Nobody can force anyone to stay. And I don't think LFS would be the same if it had a mainstream following. It's much more like a personal club race than an international F1GP and I like it this way.