Tony,
I suspect that the governing bodies are responding to the "masses" as opposed to the demands of a small subset of GCAers and even smaller one of industry folks. The litigation issue is probably out there some place but perhaps the analysis is more in the vein that if it is not broken, why fix it (I don't believe that the doldrums in golf is related to the ball issue or the cost of playing golf; IMO, it is more due to over-regulation of the economy, government spending, and the impact on the discretionary income of the population which plays golf). EPA issues including water as well as societal changes are more in need of attention and I think the governing bodies are addressing these.
Of course consumer demands change and markets adapt. Companies that endure are at the forefront, never happy to rest on their laurels. Titleist and its Korean owners can pursue the best strategies more easily than most start-ups (I think China's ability to enter and command markets over the long run is greatly overestimated- reference Japan with its much better educated, mostly homogenous population).
Bifurcation is a solution because the game of the elite players bears little resemblance to that of the average player. I played with a 59 year-old guy yesterday who when he would catch his Pro-V1 solidly, he hit it close to 300 yards. He most surely could tell the difference if he teed up a Titleist Professional instead, and I am sure his enjoyment of the game, and perhaps his desire to play regularly, would diminish. IMO, it makes no sense to give a pill to 25 million players to "cure" an illness only afflicting a couple thousand.