What should they do?
Time will tell. But in the meantime they're trying many things that none of their competitors are even considering, yet. Some of it may work, some may not. But like I said, if they fail it won't be for a lack of trying. There's something to be said for that.
It doesn't matter if they tried. Either they succeed or they fail. No one cares that sears or kmart tried. they failed. That is what we remember. HD had killer margins for a manufacturer. They sold their product as a premium niche product that should garner attention (think iphone). This worked fantastic for the boomers. It still does to the extent the boomers ride.
Then generation x (my generation) came along. We still ride, but we are skeptical of the 70 year old technology HD uses for their motors. we might still buy them, but we are more selective. HD might win us over - they just need to find a way to convince either we are wrong to be concerned with air cooled bikes or more likely satisfy our issues with the motors. But we might still buy an HD. At least we ride.
The millennials abhor motorcycles. They will not purchase them - they see no use for them. HD can't address that - not unless they can find a way to get them to want to ride. That is a whole different problem. Convincing a group of people that the product is worth it is one thing, but convincing a group of people they should even consider any product in the group is a completely different animal. I just cannot see a millennial riding for any extended period of time - how would they update facebook and tweet?
HD is dependent on bikes. Honda, and the other producers have a diversified product line and can reallocate resources. I think HD will be toast soon as a result. They won't go away, but I can surely see a time when polaris (or some other manufacturer) purchases them at a steep discount and makes them another brand in their stable. Short of something like this I just do not see HD surviving as a stand alone company unless they can convince people to buy their bikes.
Nobody is expecting them to want or receive a participation trophy. That's not the point at all. What matters is that they are not sitting on their hands, rather they are trying new things. The M8 motor is not 70 year old technology, any more than the V6 or V8 in your Chevy is. The M8 was developed from the ground up, is a four valve per cylinder pushrod engine, with a whole lot of time and money used to get as much out of it as can be. Do you think that it is older tech than the VTX 1800 or 1300? If you do, you haven't done your homework.
I don't know what you think they should do but at least they are not wringing their hands and calling the WH asking for a govt. bailout. They're trying. Survive or not, we don't know yet, but if you read their history you'll learn that they have faced worse periods of interest decline in their long, storied history. And come through them.
They don't do everything right, and they're still doing some things wrong, in my opinion which I've already stated in previous posts. But you can't (or shouldn't), fault them for trying. At least they haven't pulled the plug on all of their manufacturing here as some other companies have done.
You're coming across somewhat like Chicken Little, and also you appear to be reveling in their struggles. If the latter is true I wouldn't really expect you to be optimistic, or even objective about their situation. And you're not.
Oh, and btw, I don't believe any of their large displacement bikes are solely air cooled any longer. The Softails are oil cooled (heads), and the touring bikes are both oil and liquid cooled. And it's not just cooling of the oil itself that's taking place, the oil and the liquids are being circulated to pull heat out of the motor as well as to cool the oil.