The adage "adapt or die" would be where I would start. The industry has seen sweeping change and only a handful of the old brick and mortar players were in any way prepared to meet the challenges.
My hunch is that while Seymour was doing the cable show he probably was not as focused as he needed to be about online. He is an intelligent guy, but imho as one of his peers, he also suffered during that period from the curse of pride... which goes before the fall.
I call it "rockstar syndrome".
Someone becomes highly successful. Everyone kisses his ass and tells him how great he is and how he can do no wrong. An arrogant feeling of invincibility sets in. Then the market changes and suddenly all those people agreeing to every bad idea are gone and so are the customers that don't want to be subjected to the same thing over and over by a King that no longer cares what the subjects think, or need, or want.
The king dies. A new one is born. Another shall rise. Life goes on. And people can still make money in porn.
People make money from tubes. Content OWNERS make money from tubes. Trying to blame tube content as the great green evil destroyer of the biz is simply a fallacy and an excuse for the failings of those that never rose to meet the challenge of change.
Seymour, with his broadcast deals, dvd distribution, non-online rev streams and most importantly brand recognition and loyalty was in a better position than most to realize the best profit margins ever. Don't blame the tubes, blame not paying attention when the winds of changes shift.