I think this argument contains some shades of grey. Some things have gone right. The clubs are old enough now to be city teams, not franchises. Attendances are still way up from the NSL. Adelaide, SFC, and Victory have clear identities are viable. Wanderers and Brisbane did have but there's much work to be done to get back to where they were. It is possible, though. We know the potential of Perth. Western United, much to my surprise, are on the way to making it work.
Unfortunately I think that the Mariners are on borrowed time. City are a genuine basket case - but they can be saved. It will take their own stadium and the regional identity that goes with it. Will that happen? Can't see it. If CFG lose interest, the club will fold - of that I am certain.
So I would not say the model is "wrong". I would say flawed and badly mismanaged. Tossing it is not an option. The only option is to build on what is in place.
There have been two issues from the outset: that the clubs were never adequately capitalised, and the lack of suitable home grounds. What turned the MLS around were clubs having home grounds. This situation where clubs share vast and always empty looking grounds with the rugby codes and rock concerts has done more damage to the competition than any other factor.