Multiboxing is a double edged sword it has its place and it doesn’t at the same time. With low population games it is difficult to do content without people and if you can manage multiple accounts then you dont encounter that problem. It also keeps the player engaged with that ladder of progression and seeing what you can and cant do with X amount of accounts AKA there is an aspect of entertainment. Also FC likes money, as should any company, so it keeps them afloat and in contrast the game.
The disadvantage is that someone with multiple accounts is why should they team with outsiders and compete for loot? You lose that player to player interaction and what an MMO is. Another thing is that multiboxers control the flow of nodrop loot from raids/instances. This causes a ripple affect in players actually doing the content to get their loot. Why raid when I can buy it? That is a whole other can of worms with FC addressing this type of issue which wont ever happen. There is also the imbalance of PvP, one player being able to control X amount of professions to instantly kill people and the ability to bring numbers to PvP.
Multibox is not the single thing that the has contributed to the decline of AO. There are many reasons and some are greater than others and depends on the players perspective. TLDR: Multibox is here to stay get use to it.