Plus Foosoft clearly ignored the very large cat-owner demographic.

Yes, they are. People generally don't go out thinking 'I know, I'll buy a generic shooter game', they go out to buy 'Super Whizzbang Shooter 4'; and copyright law exists to ensure that the company selling SWS4 has a monopoly on sales.
So the idea that the collapse of 'Games That Suck, Inc' will harm the PC games market is just silly. They're not selling the same games as the publisher of SWS4, which is precisely why they're going bust.

Not really.
A lot of people (myself included) were torn between buying Modern Warfare 2 or Bad Company 2. Those games are actually pretty different, but they fit the same niche (MP FPS with modern weapons).
How many DotA games are out there right now?
Diablo-clone. Enough said.
There might be minor alterations, but if a company is making nothing but Vietnam-era FPSs and they go under, you can bet your bottom dollar that other companies are going to think twice before making a Vietnam-era FPS for a while.

That's would not be logic but fallacy.
Tons of companies goes bankrupt every day for tons of different reason that often have nothing to do with the health of their market(s) or even the health of the economy in general.
EA, Activision, and the lots of small companies have their own sales figure, their own sales previsions, and if their sales are still good enough there are not going to run away out just because one of their competitor leave the market or goes out of business. Otherwise Nintendo and Sony would probably have stopped making console after the Dreamcast failure.

Actually no. McD will find out why KFC went bust but they will also find out why they are still making profit when KFC didn't. Was it because demand dried up? Then how come they are still making money themselves? Is it because they had taken all the meat eaters for themselves already and KFC had only the veggie eaters left? In which case what can they do to ensure that the meat eaters not only stay with them but will convert veggies into meat eaters? Can they use this as an oppurtunity to monopolise the area? Can they expand, taking in the veggie eaters while keeping the meat eaters?
This is what goes through the minds of companies, however in the case of Ubi they would be going bust because they were using dog turds instead of meat in their burgers. This is why people want Ubi to go belly up, to make the others realise that if they want to turn a profit they will need to make good quality games again instead of generic shovelware and rehashes of tired franchises. They want the companies that make crap to go suffer the consequences.

Actually, if they had a monopoly on a specific type of product that would be an anti-competitive practice, which is illegal and several companies have been sued big-time over it. The idea is the better version of a product will sell better, if Hyper Shooter Killer 5 is thought to be a better shooter than Super Whizzbang Shooter 4 then it should sell better, the makers of SWS4 are not allowed to say that the competing company can't make HSK5 game because it's nearly identical to their SWS4 even if it is, they just can't actually copy the game itself, even if they play exactly the same, have weapons that are nearly identical, etc. so long as it's changed enough to be original.

The first paragraph was basically my point. They would reevaluate a lot of things to ensure that they don't go belly-up.
The second paragraph is just another "I don't like the games they make, so nobody does" argument.

No he is using an analogy. Something you do A LOT of but most of us are polite enough to not tell you, you are talking complete bollocks.

He is using an analogy, saying they won't succeed if they make crap, implying that they do make crap, which is a matter of opinion.

How is that automatically a bad thing? It wouldn't be good or bad until they were done reevaluating. Maybe they would feel PC games were not profitable enough or maybe they would feel everything was fine. Even if they did decide for or against it we would still never know if it was a decision they would have eventually come anyway to without another company going under.

And Gundato has never used an analogy to say how much he hates something? Oh wait he has done that, several times, in this thread.

Going to ignroe Delixe for a bit. He seems to get a stiffy from complaining about me.
And it is not inherently a bad thing. But let's just think about this for a moment:
When making a PC game, you need to code it in a way that it works on a wide variety of systems. You also need to optimize it in such a way that it is pretty on a wide spread of specs. Then you need to deal with all the problems that come up, periodically patch the game when a driver update breaks it, etc.
You also need to keep in mind that PC gamers expect a lot of things that console gamers don't. Mouse support is a simple, but good example.
You also likely need to set up a master server if you are making an MP game, simply because most PC gamers hate Games for Windows and tend to feel alienated if you use Steamworks. And we all hate Gamespy :p
Yeah, the best thing for PC gaming is for the big guys to reevaluate the benefit of bothering with the platform. Because while there are still games and demographics that can't be hit with consoles, it becomes a question of if it is worth bothering with that.
And if we are assuming that Ubisoft died because the chunk of PC gamers who boycotted it because of DRM was a large enough impact, can you see how that might be a bit of a warning sign to the other guys? You invest in a DRM model that you thought might make things better for gamers (yes, I realize that we all assume Ubi-DRM was an act of evil, but bear with me ;p), and your company falls apart before you can even recover from it. Yeah, that makes me want to invest in PC games.

EA make money from the PC. Activision make money from the PC. Ubisoft don't make money from the PC. Ubisoft leave and EA and Activision will not follow.
Can I also just say there is only one company that has ever left the PC and thats Epic. CliffyB: "We cant make any money on the PC, its so diseased with piracy that we cant sell ANY games not even one copy. Every PC user is a filthy pirate". Rubbish. We know it, Microsoft know's it and sure as hell Cliffy knows it. It was a PR stunt to promote the Xbox360.
Ubisoft cannot make their PC games profitable, well thats UBISOFT's fault. All this talk about Ubisoft leaving will be a bad thing. How exactly? They closed or are closing all their PC dev studios. All Ubisoft make are console ports and will you really miss them?

I don't understand how that has to do with a company deciding to leave the PC game market. That is all stuff that every single company has had to deal with as soon as they entered the market.
Or they look at the successful games that have relatively light DRM. There must be some reason every company hasn't decided to move to a UbiDRM scheme, right? Perhaps some of them actually realize that pissing off potential customers isn't a good idea.

Actually, the entire big three have moved to it. EA has it for C&C. Activision has it for Starcraft 2. Those are just easier to swallow since they are inherently MP games.
But ignoring the "fact" that DRM is inherently bad for a moment, let's think about it:
Steam is a DRM-model. But it has revolutionized gaming, and made Valve a household name, even for people who don't like FPSs. And it has also provided one of the most accepted (and effective) DRM models. And, at the very least, I love not needing to deal with discs.
EA recently took a big risk introducing a new DRM model in the form of the DLC-based model. That seems to have suited them well. And we benefit in the form of a crapton of free DLC (yay, free samples from a drug dealer :p).
Now, imagine Ubi actually dies because of this, and let's assume it is actually about the Ubi-DRM model. What does that tell you, as a publisher/dev? Don't try anything new. Because you can't just drop a DRM model the moment a single bit of bad publicity comes out. But if you run the risk of going out of business for making a DRM model that makes people angry, what do you do? And please don't say "no DRM", because that is clearly not an option for the big guys.
So we either get "Let's just pull out, we can't protect our IP", or we get "Well, Steam seems to work'. And as much as I love Steam, I am pretty sure that everyone who isn't in the USA would probably not like it if the only way to play a PC game is to use Steam.
Either way, Ubi actually falling is not a good thing.