Yes, I do. I do think so. If I didn't, I'd have given up this job some years ago, and gone full-time into the entertainment business (which is in fact Neal Gabler's business). As you suggest, most folks have had enough--and so have many people working all throughout the media. Out of such widespread dissatisfaction change can come eventually, this being a democracy and all. Once people know the score, and find out what their options are (or even that they have any), they can start to make the necessary changes.
If, on the other hand, they settle for the sort of blathering non-critique that Gabler's given us, they're likely to assume that "entertainment" is this huge, inexorable force that's somehow recently and absolutely taken over "life"--and, after all, you can't fight Madison Square Garden, so we might as well go back to sleep. In Gabler's view, there's never any state or corporate agency behind, or reason(s) for, the "entertainment," which is, in his mind, all the same--and all our fault. "One can't fault the networks" for the trashiness of TV news: "The cause was the public's hunger for entertainment; fiction or reality-based, it made no difference."
Thus Gabler always lets the big powers off the hook. Inanely, he ascribes the upbeat spectacle of Desert Storm to "television's power to convert events into entertainment"--saying nothing of the White House or the Pentagon, whose PR troops worked overtime to carry off that propaganda masterpiece. (Nor, of course, does Gabler "fault the networks" for their frank complicity.) Likewise, Gabler sees "the decline of serious literature" as the consequence of an "erosion of will" on the part of "publishers" in general--who "realized their insufficiency versus the entertainment competition, and ... sought to do something about it." That "publishers" have long since been absorbed into large media conglomerates is surely relevant to his discussion, but he never mentions it, nor does he name a single parent company.
As you suggest, there's plenty to attack in Life the Movie--which is, I'd say, about as bad as Gabler's first two books are good. (I've used An Empire of Their Own in several of my classes, and learned a lot from his biography of Walter Winchell.) For now, I'll end by arguing that Life the Movie (where's the colon?) is itself a perfect instance of the trend that it purports to analyze. High-concept ("How Entertainment Conquered Reality") and quite undemanding intellectually, with its slight scholarship and very simple categories ("entertainment" wholly antithetical to "art," and, once upon a time, cleanly divisible from "life"), the book keeps taking swipes at earlier culture critics, all of whom it writes off as "elitist" (even Leo Lowenthal!)--and yet the book itself obliquely exculpates the powers that be and finally blames the masses. Thus it's strongly reminiscent of an over-hyped and crappy movie like, e.g., Titanic--faux-populist yet patronizing, and ultimately not too memorable.
I'll leave off there, and let you help us forge ahead.