I think it can recover. I hate to use the word "tradition", because doing things a certain way "because tradition" is a fantastic way to make something suck, but this might be the exception that proves the rule.
Rogers needs to embrace the tradition of HNIC, the way CBC did. For years, CBC snuck the tagline "the tradition continues" into their broadcasts at some point, and at every turn there was some kind of nod to the history not only of the game, but of the broadcast - use of the same clips and imagery in their montages over and over again, Foster Hewitt's "Hello Canada, and hockey fans in the United States and Newfoundland", those admittedly-pointless "It happened on Hockey Night" segments.
So much of the HNIC experience was rooted in tradition and continuity - the game you watched while laying on the floor as a child with your parents on the sofa is the same game you watch today while sitting on the sofa with your own kids laying on the floor, and Rogers threw all that in the garbage in an understandable-but-misguided attempt to "make it their own". HNIC certainly had to be brought out of the dark ages, but I think they did way too much way too fast, and viewers tune in and ask "What the hell did you do to my show?!".
Cut back on the expensive studios and graphics and bells and whistles, remind the on-air staff that Canadians (rightly or wrongly) see HNIC as a sacred cultural institution (not a place for idiotic hijinks or a vehicle for corporate synergy), and maybe cut down on the number of regional games airing at the same time, and that would go a long way in bringing people back.
Also, stop airing Coach's Corner with Ron and Don in separate studios.