Yes, but isn't Steyn making the point that younger people will be asked to foot the bill to support a growing cohort of older, non-working, retired people? The (decreasing) death rate does, as you point out, affect the population growth rate (due to the fact that people are living longer and longer), but it affects it in a way that exacerbates the problem that Steyn is bringing to our attention. Longer life expectancy means more years spent in retirement and an increase in the number of retired people living off the efforts of younger, working people. The problem, as Steyn argues, is that the low birth rate provides insufficient numbers of new workers who can support retirees, especially considering the decreasing death rate.
The "fatal flaw" is actually yours, in that you address birth/death rates but not net inward migration of Muslims into Europe. Steyn addresses both. Holland is now more than half non-Dutch, mainly Turks and Moroccans. The ethnic tensions there are there for all to see, as muslims demand separate schools and application of Sharia law for themselves. Most muslim immigrants come from poor villages and lack education. The riots in Paris suburbs are not being carried out by Europeans, but by muslims immigrants and their (partially) French-born children, who remain unemployed and unassimilated. See Bruce Bawer's "While Europe Slept" for details. Anyone who thinks he can spot a schoolboy error to debunk a book that's been reviewed in hundreds of publications is dreaming.