mdd: You have no clue about history. In Poland,pre-world war II, there were thousands of botei midrash everywhere wehre baalei batim and yeshiva bochurim learned every day. In Hungary- pre-deportation, there were hundreds of frum villages and towns and in Lithuania- the greatest gedolim were living there. Ironically, the jews of Germany,where indeed there was great assimilation, were the only ones who actually escaped the holocaust,as they were expelled but left (mostly) alive and emigrated to many parts of the world (including palestine,btw).Also, the jews of Russia, who truly were assimilating in great numbers pre-war, due to the communists, were the only ones who escaped the holocaus in great number.
Sure, there were many who left the fold in other parts of europe but percentage wise- there were more frum jews in europe pre-war than there is today in israel!
so, your analysis is dead wrong!
As for your second argument, it is pure sophistry. You can always claim that- if not this or that- there would be more-but this is your false assumption and you cannot, for one moment,prove it.