Buffalo is a unique case because professional teams in shut-down industrial cities are bound to fare poorly. Professional teams in government cities (Ottawa, Washington, etc.) also tend to do poorly as well.
In many cases the NHL didn't exactly "put" teams in cities that made no sense -- most of the re-locations over the last 10-15 years involved teams that came to the NHL in 1979 as part of the NHL-WHA merger. Of the four WHA teams that joined the NHL, only the Edmonton Oilers remain in their original location. The other three (Hartford, Winnipeg, and Quebec) have all moved to larger markets in the southern or western U.S.
What's interesting about Canadian cities is that when it comes to hockey they draw far more fans than they would draw in the U.S. on a per-capita basis. When Saskatoon had their bid for an expansion team rejected back in the 1980s, they had already gathered nearly 17,000 season ticket requests even though Saskatoon had no more than 175,000 people or so at the time and the entire province of Saskatchewan had fewer than a million people. The Canadian prairies are the kind of place where people will drive two hours each way in -40 weather just to see a junior hockey game.
The Bettman era marked the end of the NHL as we once knew it, and the league's official demise occurred when they got rid of those old division names (Smythe, Norris, Patrick, and Adams) and conference names (Campbell and Prince of Wales) and replaced them with bland, generic geographic names in a desperate attempt to attract informal fans who had no appreciation for the great history of the game.
Buffalo has been in an economic crisis since the 70s, they were dieing before Pittsburgh was dieing, and now Pittsburgh is better. Basically once Hasek left there wasn't a reason to go to the games anymore, it's not like the Sabres have ever been a good team. (don't you think Satan should be a Devil, doesn't it just make sense)
I'm thinking of crappy locations all the way back to the first expansion. They put a team in one of the WAY interior suburbs of SF, they've got a WCHL team now. I had one of the CD the Hockey News puts out, my favorite part was the time line and saying "they put a team where".
It's the national sport in Canada, I'm sure we're supporting baseball teams in cities of a size that would never work for baseball in Canada. But sometimes it's just mind boggling. The fact that the middle of freaking no where Alberta had TWO teams and the national capital had none was always bizaar. And now the one in the national capital is going broke... it's a wierd league.
I miss the old names, but I also understand why they went away, having brought people into the sport the old names were a pain. The three hardest parts of the sport to explain were icing, the division names and the conference names. It was a real barrier to entry for new fans. Now if only they'd get rid of the tagup part of the icing rule.