It is correct that the new generation of fans will be lost forever. They will form other allegiances, or take up other activities, and if and when the club returns to the city there will be very few youngsters of that age group bother to turn up.
But it's far worse than that. The diehard middle aged and older fans are being driven away after a lifetime of following city. Thousands have drifted away since relegation in 2001, leaving the diehards, of which I would include myself. I haven't done away games for many years, but never missed at home, despite living 25 miles away for the last 15+ years. People that I know, of my generation, have just simply stopped going, and having got out of the habit it will take a lot to get us back.
I am unwilling to do a round trip of 120 miles every home game. So the absolute minimum to get me back would be playing in Coventry. Whether that will still be the case in 3 or 4 years I cannot say. I have lost a lot of interest simply because, as far as I'm concerned, we don't have a CCFC any more. And many people I know have similar feelings. So it's not just the younger generation being lost to the club, it's the older fan too. The only people left will be young people with the time and inclination to go, and the real 'anoraks' (which I don't mean disrespectfully) who will go anywhere to watch a sky blue shirt. This does not look good for the future, as even if the club returns to the city, it will need a degree of success to start getting the former fans back.