Hi Rick,
The CDWGs are designed to create an acoustic lens, that due to the physics involved will create a greater dispersion of specific frequencies based on the width and position of the apature.
Acoustically this method will then, of course distribute the sound energy over a greater area. This distribution will, again due to the laws of physics, reduce beaming, and increase directivity. Anytime you disperse energy over a greater area it reduces it. That is why, you cannot easily A-B CDWG's on, CDWGs off since you would need to boost the energy of the panels to accommodate for that increased dispersion.
Your "thin felt" suggestion would not operate in the same fashion as the physics would be much different. All that would do is damp some of the higher frequencies, and have no acoustic lens/wave guide properties to speak of.
Applying felt and foam just outside the panels has been a favorite tweak of many, but not covering the driver, and not to improve directivity.
I might also take issue with your assertion that the components Brian used were "wretched" and should not be used in a High End Speaker. You are certainly entitled to your opinion, but it might be better received in another Circle other than the VMPS Circle where most of the owners know how good their speakers sound, L-Pads and all.
This may have been due to Brian's artistry which has held the test of time and been proven in hundreds of systems over the last 35 years or so.