Remember there's no height restriction with translators per se
Actually, it's rather the opposite. FM translators' ERP are governed by a wacky "MERP" (Maximum ERP) system that's governed by HAAT along certain azimuths. It's spelled out under
47 CFR 74.1235. Go ahead and read it. I promise you'll be scratching your head wondering how in the hell the FCC came up with the rules...but whatever, the rules is the rules.
I concur with your analysis of AM stations using FM translators. It very much depends. I know the FLRG is using that concept to quite a serious extent with a network of small Class C and Class D AM stations, most of which have pretty decent FM translators that are covering the cities of license nicely. Now, part of that is the nature of the Finger Lakes; several small towns/cities (each 5000 to 20,000 pop, give or take) that are mostly 15-20 miles apart from each other. A Class C station can cover the COL well, but so can a well-placed 50 watt FM translator. And the translator doesn't suffer from the "Graveyard Channel Noise" after dark that most Class C AM's do.
OTOH, I'm in Santa Barbara now and local news/talker KTMS 990 has an FM translator and I sorta wonder why. Day or night, the translator doesn't cover Santa Barbara proper very well. And day or night, the 990 roars into all the population centers around here; they've got a pretty good signal. Although, admittedly, day or night...especially night...KFWB 980 out of LA undoubtedly roars up the saltwater path between here and there, too. And day or night, FM usually is superior audio fidelity to AM.
Flip that around again, Entercom recently blew up "Mike 93.7" on WMKK and made it a simulcast of their flagship sports talker WEEI 850AM. WMKK is close to a full-market Class B in Boston, and WEEI has a killer daytime signal but at night they null westward and lose a lot of lucrative audience in the Metrowest areas. In just one quarter, having the FM outlet spiked their ratings and brought them a heckuva lot closer to their new arch-rival the SportsHub WBZ-FM on 98.5, which
is a full-market Class B FM signal. That's a simulcast that, while costly, is making a lot of sense.
To get back to the original question, in its purest form, as to whether the LPFM service is "working" as a whole? After running WHWS-LP at Hobart & William Smith Colleges for 3.5 years, I would argue that it really isn't. The non-commercial nature of LPFM really hangs some serious shackles around what you can do to raise revenue. The only way to get enough potential listeners with the power restrictions (100w ERP @ 10m HAAT or equivalent) is to be located in a high-population-density area...and none of those areas have enough "room" on the dial to fit any new LPFM stations in. There are a handful of exceptions, I suppose. And there will be a handful more if the new filing window (sans third-adjacent protection) ever comes. But for the most part, LPFM is a service that only can be done in rural areas where the population density isn't high enough to sustain traditional fundraising or underwriting efforts. That means it only works when you've got parent organization, like a college or church, subsidizing the operation. Neither of which fulfills the original mandate of LPFM which was to allow greater access to the airwaves by underrepresented parties.
Mind you, I thought we were doing a decent job with WHWS. Certainly we weren't UNpopular in town or on campus, and quite a few people liked what we were doing. But we had a lot of advantages: subsidization by a college, access to satellite programming via the ContentDepot system shared with WEOS (the NPR affiliate), access to all of WEOS's remote broadcasting equipment, sharing WEOS's Enco DAD automation system and Logitek Audio Engine, a mandate to broadcast a lot of HWS sports and a budget to support that, etc etc etc. Plus the small size of the college meant a lot of hours in the day when there were never going to be students programming the station; thus giving us the freedom to air things more popular in the community, like
The Takeaway,
The Mid-Morning Reprieve, and
Radio Bilingue. Those all add up to a sizable advantage most LPFM's would never have, and even then we had little luck attracting fiscal sponsors and no possibility of really garnering any listener donations.
I think if you allowed LPFM's to operate as commercial stations, you'd see greater fiscal viability. But you'd also inevitably destroy the core nature of the service in the process. Oh well.