Personally I don't have Sky Sports and can truthfully say I don't know anyone who does. It bugs me to have to go to the pub if I want to watch Munster or Leinster(I'm not confused, just a Red married to a Blue) and if I had to go and watch the Internationals down there as well, I'd be very annoyed. I'd also be very annoyed if I had to make a choice between dragging my kids to pubs to watch games, and thus associating pubs with sports for them, or shell out hundreds extra to watch them at home.
The IRFU arguements is partially flawed, Sky could still bid for matches, as could RTE so they would get some TV income in. Free to view is not free to air. They could charge their advertisers and sponsers more because they get more visability and that would offset some of the loss in income. They could be creative and do a deal with RTE to take a cut of advertising and sponsership money RTE get in, or insist as part of the deal that the AIL/schools/minor internationals get far more coverage. Instead they they just seem to have thrown the toys out of the crib.