You assume the people from the top would be willing to go to a lesser Kingdom, which under ideal conditions would happen, but currently it probably would not. I can say for one, that I have no intentions of ever playing in a ghetto again, unless my old KD mates came back which is unlikely.
This is the jist of the problem and hence why Bishop argues that this fix will be temporary. With any feeding Hierarchy it is shaped like a pyramid in order to sustain itself, with the bottom (ghetto's) being in the largest quantity and the top (SKD) being the least. The mid KDs will feed on the ghetto's and everyone will get fed on by the Top. Now, no one likes to get fed on age after age after age, hence people in the ghetto's tend to be the first to either quit or find a better KD. Which means the numbers of ghetto's decrease IF THERE IS NO NEW PLAYER INFLOW. When ghetto's decrease, then mid-tier KDs have no one to feed on and the top tend to feed on more mid-tier KDs, causing mid tier KDs to transform into Ghetto's, and so on and so on. Thus reducing the KD size doesn't solve the underlying problem, hence a temporary fix.
Your right players are leaving, but players left utopia even during its glory days. But the difference is that more players joined, hence the ghettos were always full. By making this change you hope to increase competition and because of that people will not leave. People will always leave even with the most ideal conditions, this would make them leave slower, but because we have almost no new player base growth this doesn't solve the underlying problem. Which is we need more players.