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With point three I'm really trying to argue that it's better for the poker site to have the weaker players loose to other poor players and the house than to winning players who make many more cashouts than they do deposits.

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I don't see the logic behind this. What difference does it make whether or not people make cash outs? Regardless of the deposit/withdrawal frequency, you, me, bad players, good players, pay rake.

It seems that you may not understand what the pros and cons are for different types of players at cardrooms. You may want to consult Mason's Poker Essays where he talks about this. But basically, winning players help maintain games so that bad players can play. Good players tend to play more often at rooms with worse players. When the balance tips, good players will start to leave for greener pastures.

A cardroom needs a good mix of types of players as well as the luck vs. skill ratio in particular games for a room to be successful.

FWIW, I do agree with you about the rake war. I don't really see that happening, but I do think that rooms will offer reduced rake options and other methods to get players to play. A room can start to grow with a base of decent, consistent players and then eventually attract bad players to keep the good players, etc., etc.

I do think that economics apply to poker rooms. If the rake is too high, no incentives, etc., good players will leave for better opportunities. Good players do, after all, tend pay more rake as they tend to play more.