Although I hate to say it, I think that Mike Love was in fact right - the people didn't want The Beach Boys to make progress and do new things. 'Pet Sounds' sold worse than the last six albums that The Beach Boys released before it. 'Heroes and Villains' was relatively a flop, going to just #12. I'm afraid that 'SMiLE' wouldn't have been a big commercial success either. Everything new that The Beach Boys tried after 1967 was by definition commercially unsuccesful.
Every hit they scored after 1967 was either a retro song trying to recreate the old sound (Do It Again, It's OK, Good Timin', Getcha Back), a cover of an oldie (I Can Hear Music, Rock & Roll Music, Come Go With Me, Wipe Out), a piece of musical plastic (Kokomo) or a re-release of older material (like the Endless Summer and Spirit of America compilations). Brilliant albums like 'Wild Honey', 'Sunflower', 'Holland' and 'Friends' all flopped. Brilliant singles like 'Friends', 'Break Away', 'Long Promised Road' and 'Surf's Up' flopped.
I agree completely with what you write about Mike Love. He didn't want progress, he wanted to stick to the formula. To this day, he himself won't even try to deny that.
I think that The Beach Boys in the mid 70s had two options. One: continuing as a cult band, making excellent new and progressive albums for a relatively small audience. Two: giving up on that and becoming a flesh-made oldies jukebox. The Wilsons wanted to go in the first direction, Mike Love (and probably Al Jardine and Bruce Johnston too) wanted to go in the second direction. By making Endess Summer and Spirit Of America so hugely successful, the American public basically voted for Mike.