This is very much a point I was about to make. (Honestly, the decline becomes apparent with the GBAFE era, not what came before it). Let's look at some numbers, eh?
Top 20 FE Sales Numbers (broken down by region; NA/Japan/PAL):
1. FE3 (0.70m, Japan)
2. FE13 (0.63m, NA)
3. FE4 (0.58m, Japan)
4. FE13 (0.52m, Japan)
5. FE7 (0.49m, NA)
6. FE8 (0.42m, NA)
7. FE6 (0.39m, Japan)
8. TRS (0.37m, Japan), if it were included
8. FE8 (0.30m, Japan)
9. FE7 (0.29m, Japan)
10. FE9 (0.29m, NA)
11. FE11 (0.28m, NA)
12. FE10 (0.27m, NA)
13. FE11 (0.27m, Japan)
14. FE12 (0.27m, Japan)
15. FE5 (0.26m, Japan)
16. FE7 (0.18m, PAL)
17. FE10 (0.17m, Japan)
18. FE9 (0.16m, Japan)
19. FE8 (0.16m, PAL)
20. FE9 (0.08m, PAL)
A Fire Emblem game, even with Awakening's commercial success, has still never surpassed 1M sales in any given market. What sells? FE4, one of the more complex entries in the series, has still sold more copies than most of the rest of the series. FE3, the definition of "classic FE," and FE4 both outsold FE13, and that was a game designed to sell copies. Keep in mind that top-selling FE3's remake didn't fare that well either, the series was basically stuck with a "core audience" of roughly 0.30m per title from FE7-12.
The case that FE's sales dip as it goes in a more "hardcore" direction? That claim by @Agro a bit more dubious. Aside from the SNES era's dominance and Awakening's money-printing machine, FE7's NA release (a very traditional "classic FE" game) clocks in 5th place. FE8 sold almost as well. Consider that these numbers were likely inflated in NA by the hype surrounding Marth/Roy in Smash and the allure of mysterious games we'd never gotten to play before. FE9, with a low install base, and FE10, one of most inaccessible titles in the series, represent a "core audience" of roughly 0.28m players in North America. That's an attachment rate of about half the audience attracted from the series' debut. FE9/10 are the west's only taste of "hardcore FE," and it didn't "flop" in the way people want to assume because it fits their narratives. Likewise, the "back to the basics" FE11 sold on par with 9/10, further indicating that it only appealed to that same core audience.
FE9/10 really flopped in Japan. They were actually commercial disasters, and a clear low-water mark for the series. FE11/12 brought the series back up to roughly where the sales numbers were for FE7/8, both of which were also under-performing periods for the series in Japan (compared to the SNES heyday). The series has basically been in decline since FE5 (but we can't attribute it to FE5 because of the nature of that game's release), the bleeding became apparent in Japan during the GBAFE era, and bottomed out with GCN/Wii.
tl;dr: Fire Emblem has not come close to reaching, let alone exceeding, its sales potential (0.70m units in a given market, set by FE3) in a very long time. Awakening is the closest they've gotten, and even tailoring a game to casual appeal and fan nostalgia wasn't enough to actually break the series sales record.
"The numbers speak" fallacy. You can make numbers say anything; that doesn't mean you're taking away the right lessons.
I don't know how else to put this; I believe you're buying into a narrative based on a false choice. It is not that case that something "for veterans" must be inherently "bad for newcomers," or vice versa. Making the game more accessible doesn't have to mean making it easier or changing its fundamental philosophy. At this point, we're basically asked to "pick a side," classic or casual (Nohr or Hoshido). The way IS has approached these problems has basically created a gameplay dichotomy; the version that "sells," based upon freedom from consequences and restrictions, and the "old Fire Emblem," which is based largely on the micro-level impacts of a player's decision-making.
Why can't we change our design philosophy to incorporate considerations for both, without stripping away the core element of finite resources, but instead making these decisions more manageable for all players? That's my approach, at least.