Didn't Phish inherit the Deadheads after the Grateful Dead stopped performing? That's a unique situation and hardly a business model.
My dad and my uncles (all born in the 1950s and 1960s) were serious Deadheads. They've gone to over 100 Grateful Dead shows a piece. None of them really have any fondness for Phish, but I have no idea why.
I know my anecdote can be countered by several of the opposite side, but as a laymen to jam music, I can definitely hear a very fundamental difference between Grateful Dead music and Phish music.
They all had a heavy lean to the Blues/Country side of things, so they're all big fans of Steve Earle and the like.
They all got together to go see Mark Knopfler and Bob Dylan recently, and they all went to Van Morrison a while back.
EDIT: I think it's important to note that my dad was so distraught by Jerry's passing that he took a day or two off of work and sat around listening to old shows on cassette tapes.
I think later that same year I saw a really nice Phish show in Boone and the crowd felt larger. A few years later people seemed incredulous at the thought of Phish shows with four-digit-sized audiences . . .
What was super interesting to me at the time was how intensely the audience was "bonded" to Phish shows. We were already joking a bit about how they had a group of "lifestyle" followers. In the current lingo, I would have said they had gone viral already. Fun times.
'94 Murat (2000 seats sold out)
'95 1 night at Deer Creek (20k and not sold out)
Jerry's death
'96 3 sold out nights at Deer Creek
Winston had an interesting music scene back in those days (80s/90s, can't speak to since then). Phish, Widespread Panic (in the chapel at Wake Forest!), Dave Matthews, Leo Kottke, Alex DeGrassi (there was a guitar society that was active in promoting acoustic artists). Many of the MTV up and coming metal/hair bands seemed to pop into Baity's (a long closed Winston spot) for shows on their way to becoming bigger venue acts (all pre-grunge). Sometime in the late 80s and early 90s a number of blues guitarists would roll through the Triad area as well.
In hindsight, it's kind of interesting to consider just how many quality musicians came around central NC. I worked in a guitar shop for a summer and there were actually a surprising number of highly skilled amateurs playing. But for some reason, this translated into few active bands.