Twenty-five years ago. MTH did push Lionel to innovate and in that regard MTH helped Lionel develop the hobby we have today. But that was twenty-five years ago.
The hobby and it's expectations have evolved too far the last quarter century for Lionel to go backwards. It's not in the current Lionel's culture to say: "OK everyone! MTH is now gone! Fill our next catalog with tired postwar Hudson's and GPs with mechanical E-units" That is not happening! Even without MTH, Lionel still has lots of completion for discretionary money spent on hobby and leisure activities. Lionel can't rest on it's laurels or those dollars go else where.
I know that people are emotionally invested in the concept of MTH as a company and it's story. However, the hobby is going to be just fine post MTH, it will go on!
That's a little bit off my point... certainly Lionel will not go backwards. Nor will anyone else. But, IMO, MTH and Lionel mainly drove the technology in today's O gauge industry. They were almost like the PC/Mac competition in the personal computer industry--the two big players that drove the industry forward.
Backwards - no. Lack of as much forward momentum-highly likely!