Very well-said, but where No Line went wrong isn't the fault of Eno & Lanois. The previous collaborations with those producers did not result in compromised releases. TUF, JT, and AB were self-enclosed artistic endeavors. And as you said, whatever one may think of ATYCLB, it achieved what it set out to do, because the band stuck to the plan of crafting solid pop songs.
By writing and recording in Morocco, with both producers, the band was doing something fresh, if not wholly new. If they hadn't gotten cold feet before the end, and putting things like Crazy Tonight, Stand-Up Comedy on there, failing to complete Winter, and toning down some of the more exotic elements on something like Magnificent, we might have wound up with an album that, marketed correctly (and with better reviews, I'm sure) could have crossed cultural lines and shown a U2 to the public that wasn't retreading over the same ground.
Boots, however inventive, sounded too familiar to most people, and didn't come off as fresh. Magnificent, in its album form, would likely have resulted in a similar effect. Moment Of Surrender may not have burned up the charts, but it certainly doesn't sound like typical U2, and to many fans it was a powerful work. You shoot a video that takes place in Morocco and showcases the inspiration on the album, not in an abstract Mysterious Ways-style, either.
And maybe something magical happens.
We'll never know for sure. But Lanois and Eno aren't the problem, it's the band second-guessing themselves.