There is a huge demand for high quality, but people prefer "existing good enough" to "hypothetical high quality" ...
I think that's a very important point. Citizendium's biggest problem isn't anything to do with their model, it's just that we have such an enormous head start. The only contributors they're likely to get (and they're not going to get any significant readers for a while yet, I imagine) are people that want to cheer for the underdog and be involved in a project from the start, who will likely leave if Citizendium gets any great success (and, more importantly, not be replaced), and those that are extremely enthusiastic about the key principles that differ from Wikipedia, who are likely very small in number.
In short, they are too similar to Wikipedia to be able to catch us up. There is room in the market for more than one free encyclopaedia, but they need to find their own niche. A vague principle of welcoming experts is not enough. Perhaps Knol will be able to find one - we'll have to wait and see.