Al, you are probably correct in the Crowes assessment. I just thought they could have done so much more after the first two albums. Granted the industry has changed so much since they came on the scene and has really became fragmented. Fortunately for them the classic album rock stations play their tunes so they have some mailbox money to keep them going.
The relentless touring didn't hurt either. I think they really pulled a Pearl Jam, and just said "to hell with it, we're making the music we want to make. If you're on board, you're on board." Their popularity (and overall impact) slipped, but I don't think the quality did.
However, when you're doing a "greatest" list, popularity and impact have to be considered. At least in my humble opinion.
I hear what you're saying, but I think you'd be surprised at the number of bands that have taken cues from Pavement. They were one of those bands that you couldn't really categorize or pigeonhole into any genre. They kind of made their own rules as they went and had a sound that others couldn't really replicate, which which set them apart from most great bands of the 90s.
I know Pavement's influence has been pretty wide, it just kind of seems that all the bands that were influenced by Pavement have gone on to be just as much, if not more, of "niche" bands than Pavement (save maybe Weezer). I think the measure of a band who isn't popular but has a huge influence is whether or not the bands taking their cues from them achieve a greater level of popularity. With the Velvet Underground its almost inarguable that there were bands who were influenced by them that went on to be a lot more popular.