I dont think it has become any less of a racing sim, there are just less people "racing" because of these other types of gameplay. I have played LFS pretty much since day one, and even back where we only had the one track and 3 cars not all the servers were race servers, there were drift and drag servers as well. I think its good that we have a few choices of how we play out favorite GAME. I personally like to jump on cruise servers. Years ago all I did was race and I have been in teams n` all that jazz, but I have 2 kid now so its very rare for me to find time to enjoy an uninterrupted race so I cruise, its a little less disappointing when I have to pit or leave 5 mins into playing.
So is LFS any less of a sim because of ppl like me, I dont think so, atleast were all still playing and supporting LFS when we could just go on to the next game.