Living World, I love it. But...
Overall game population? Nay don’t worry.
Maybe worry about your server population, although the fix is easy transfer to a higher population server. Of course you would then be adding to the problem, but your problem will be resolves. I think a lot of players have done just that though, so low pop servers are lose players as they transfer to higher pop servers. Not sure if this is a massive trend of anything, since I don’t have any real data.
It’s certainly possible that the highly temporary content is driving away players. Perhaps if Arenanet added the option to replay the main living world story events (permanently) then less would be leaving?
Its not so much the living story as a concept, but the actual story they tried to tell – It was boring, silly and unbelievable. After every release the forums were full of threads asking what the hell is going on? nobody had a clue… the whole arc was just some unbelievable disjointed mystery.
“Boring, silly and unbelievable” sums it up pretty well.