No, he was not right, primarily because Dream Theater is not the kind of band that can disappear for 5 years or so and come back "bigger then ever" (I believe those were his words). They are not Metallica or GnR where they can play shows after not releasing an album in over half a decade and still expect to draw in large crowds. In my eyes, Dream Theater are in a rather precarious position with their popularity. The current high level of interest they can command is based, in part, on the regularity of their write-record-tour schedule. They don't have any big hits from their past on which they can rely to draw in concert attendees (when was the last time Pull Me Under got played on the radio?).
The point is, Dream Theater needs to keep their momentum going. They spent a decade after SFAM building up their position until they reached a point when they signed with Roadrunner where they were totally in control of their own careers due to a level of popularity far greater then what music of their limited mainstream appeal would normally warrant. But all that was dependent, in part, on releasing albums and touring on a regular basis. Taking a 5 year break would have ruined that, and it's likely they would have lost momentum that would have taken them years to regain, if at all.
Beyond that, I have other reasons for feeling Portnoy was wrong. In the realm of personal taste, SC and BC&SL were the two weakest albums of their career. The lyrics and vocal melodies were becoming rather lazy and uninspired, and the inclusion of trendy "modern" metal elements, like the grunts and so on, did not fit in well with the established sound of the band. I don't hate those records, I do enjoy them, but they are my least favourite in the entire DT discography. The two records they have done post-MP, especially DTXII, smoked them in every possible way.
Also, I really don't see any notable decline in their album sales and concert attendance. Since they signed to Roadrunner, all their albums have consistently sold 35 to 40 k in their first week, and based on my personal concert attendance, their crowds are as big as ever. I do think they may have hit a bit of a plateau, though, in terms of fan base growth. Even so, the simple fact that they have been able to get their first Grammy nomination 25 years into their career (and a second nomination for the next album after that) shows that they still have new markets to break into and new audiences they can reach. Their growth may be slowing, but there is still further potential.