I want to amend my previous remarks on this subject, because I think IcedFairy deserves praise. If nothing else, his appraisal on the state of the fandom has inspired those invested in it to speak up, and seems to have pulled those on the fence about it into examining how they feel about things. So on that note, here's where I'm coming from with regards to canon and consistency: I think there is no ultimate, established Right or Wrong in all this.
It can simultaneously be true that in some cases, ZUN made deliberate choices to be inconsistent; in other cases, there were things he clearly overlooked; and in other cases still, there are either bad translations or misunderstandings. All of these things can be true simultaneously, and I think a big part of the frustration is seeing these things as mutually exclusive.
I will say, though, that if the western fandom has waned (and I'm honestly not sure about what the hard data on that is), some things are more understandable than others. Like, yes, Ten Desires was terrible. But I think ZUN has pretty much knocked it out of the park from TH14 onwards. And if we lost fans to Kancolle, honestly? Good riddance. The folks who marched on over to the ships and left Touhou behind were predominantly the kind of "fans" who'd refer to the Gensokyans as "lolis", and the less of those sorts the better. If anything I'm glad Kancolle served as a magnet for some of the less savory fans in our midst (though I make no illusions that a lot of them aren't still around).
In the final analysis I'm not overly concerned about the WTC losing numbers. I'm much more comfortable with a small but enthusiastic fanbase than a larger, disjointed and kinda patchwork fanbase. And again, I'm grateful IcedFairy has sparked something of a renewed discussion on the subject of Touhou canon, for all its strong points and flaws.