Sean,
I think Matt is right on in his responses to you. As for whether it is a few people who are the problem or everyone is playing slow now, I think "it depends". On some courses, either due to the design or due to the clientele, slow play is the norm. If you can normally play in under four hours if you didn't have to wait and played regularly on a course where rounds were normally five hours, you might slow down in some ways to avoid annoying waits. Perhaps you'd deliberate more over your putts, perhaps you'd always use the honor system when teeing off instead of allowing whoever is ready to go ahead, etc. But if things changed and four hour rounds became the norm, you'd be able to adapt rather quickly.
If your course is one of many in the area, with little to distinguish it from the other options, being known as the course that kicks off slow players could end up being quite a benefit. All else being equal, I'd play more often at such a course because I'd know I'm more likely play a bit faster, and don't have to worry about getting stuck five groups behind some idiots who have two holes open in front of them as they make the turn. Slow players would hear about that course's policy (or be affected by it once) and would never return. So it wouldn't take long before all the slow players would stay away on their own and the course wouldn't even have to actually kick very many people off once the word got out.
As for it being bad business to kick slow players off, obviously you can't kick off a quarter of your groups, so you just target the worst offenders. If it is just a few percent who are affected I think it would be a very smart business move. The idea of "the customer is always right" is a really dumb idea for business owners to have. Yes, you need to accomodate customers the large majority of the time but in various businesses there may be a few percent of customers who end up costing you much more than the revenue you gain from them. If you have a coffee shop and a couple guys buy a single cup and then take up a table all day using it as their "office", that's not a good thing for you. If you have a clothing store and a couple women will spend several hours trying on dozens of items but always walk away having bought only one, that's not a good thing for you (unless maybe you are selling designer labels that cost in the four figures)
I own a sports bar/restaurant, and one of the first things I told my GM is to not be afraid to kick people out if they cause trouble. If someone gets too drunk, is harassing other customers, or is looking to start to a fight, they will be told to leave. If they refuse, the cops are called. If you call the cops on someone they may never return, but I'm fine with that. If they do return, they are very unlikely to repeat what they did previously - if they do they'll be kicked out for good. I've always thought that if you tolerate people like that you might get a bit of extra revenue from that person and their friends, but you undoubtedly lose several times that from other customers who don't like that atmosphere and will not return. This only has to be done a handful of times a year because the troublemakers prefer places that let them get away with this stuff, so they tend to congregate at places run by idiots who believe that you should never turn away a paying customer.