This is not really Blizzard losing the players, just postponing the playtime. Most of that 6 million moved to the Taiwan servers, and the rest are just waiting for the red tape to be cleared. I am sure Blizzard will lose a few players out of this as other competitors come running to try and fill the void, but I would bet most will be back once the servers go back up. (More so since that would mean they finally get WOTLK, which has yet to go live on the official china servers)
Even in the very rare chance that none of those players return once the servers come back online, Blizzard would still be the largest western MMO by a couple million, just not the worldwide standard. I don't think most players care if they are the largest, just that they have enough interest in the franchise to keep giving us updates.
Also, no idea how your friend was unable to log on. I have been getting on consistently all week. He might have had his own faulty internet issues. I think the last time I have problems logging in was a month ago, and that was a few seconds of authentication being down.