This has got to be one of the most ridiculously dramatic things I've read in a while, and that's saying a lot. If the gamepass model fails or causes a degridation in quality it will have a long term collateral impact on the industry? Give me a break. Companies have been making bad games, or cash grab games, for decades without the industry suffering. You know what happens when they make bad games... nobody buys them and they lose money. As a consumer I lose nothing.
I guess I fail to understand why I am supposed to worry about the sustainability of their model. I am not a stock holder, I don't work for MS, and outside of owning a video game console I have no vested interest in their decisions. If they cancel gamepass or even quit making games, life will go on and somebody else will fill that gap. Just like Sony did when Sega moved away from making consoles.
Personally I would say the lack of risks in the video game industry have had a much more negative impact on it than anything. The lack of originally, never ending sequels, and regurgitation of ideas has made me less interested in video games now than I ever have been, and I've been a gamer since the Atari. You want to be concerned, focus there.
Finally, I say you are jaded because you talk in negative absolutes without fact or data to back it up. You assume that gamepass will hurt the industry instead of bolster it. You assume it will never be profitable or will hurt development. You have nothing to back this up except skepticism of the platform. Here's the reality... If MS finds gamepass to be a failure they will quit offering it and cut their losses, just like the did the Zune, and just like Windows Phone.