The concept behind The Wall is sheer genius, you're correct; and I've always thought this, and in fact argued a bit with one of my old literature professors about it. I think that the theatricality of the record is supposed to be taken with a grain of salt. It comes across as pompous and pretentious because many people see it as too serious for its own good; but I think that the theatricality is just a ploy.
The album is commenting (partially) on the very nature of the relationship between the artist and the audience. While Waters builds this theatrical, bombastic stage show, he's also lamenting the loss of the intimate, personal relationship he used to have with his audience when the band played small venues. It all stems from the fan whose face Waters spat in when he tried to cross the wire mesh netting between the crowd and the stage. This is an example of, quite literally, the disintegration of the connection between audience and artist. Waters was disgusted by the idol status he'd been awarded, but he was also disgusted by his own behavior toward the fan. Thus, he envisioned a wall being erected around him, sealing himself off from the outside world.
