For our community here in the Philippines it was the reverse -
netplay helped build the community. I started out playing in some random hamachi server then I met another Filipino player, who knew other people who play, etc. Now because we got to know each other through netplay, then we started seeing each other regularly for casuals and tourneys - which I suppose can also be attributed to the crappy internet connection here.
I can't imagine me meeting people from the scene here if it wasn't for netplay because there's was no other venue to play mbac over here. Oh and about friends who play the game... to some poeple it's just not an option. None of my friends like to play fighters. They're just not into it no matter how I try to introduce it to them. Which is why netplay can be a godsend for me to meet others with similar interest.
So I guess for the NY scene, netplay hurts their community, but in other cases it benefits others. To each his own I guess.