The PRC has intended and continues to execute a form of cultural genocide in order to solidify their rule and to make it impossible to return Lhasa locally to any kind of Tibetan model.
Hu Jintao, who was once governor of the TAR, said (off the record) that it was official PRC policy to totally annihilate the Tibetans and their culture.
The Chinese are not really doing anything that hasn't already been done plenty of times before by the Chinese and numerous other cultures. Throughout history many cultures, many in the present as well, have insisted on forced adoption of cultural paradigms, languages and so forth.
The Canadian state forced native children into boarding schools not so long ago where they lost their language and heritage in a generation. Likewise immigrants from Europe were expected to learn English (or French depending on where they were going) and fit into mainstream society. Their children might have spoken another language at home, but they were educated in English and then their children spoke English as a native language. Cultural homogenization enabled the country to be integrated with a common identity. This goes against the wishful thinking of liberal ideologies nowadays, but at the time it made sense to the public and state.
In a similar way, Japan homogenized its population to the point that everyone from Hokkaido to Okinawa thinks of themselves as a single culture, race and ethnicity, regardless of the fact there used to be massive linguistic and cultural gaps. This led to the social stability and effective management of the populace that Japan presently enjoys.
The PRC is especially concerned about any social instability that multiculturalism inevitably brings. When people see themselves as "us" versus a "them", there is cause for separatism, which can be the death of a state.
Consequently, six million Tibetans losing their culture are of little consequence to a country with over a billion people. Moreover, to the PRC and its population, if a unified and powerful China requires the eradication of Tibetan culture, then so be it.
I imagine the top echelons just see it as a necessary evil. They probably realize it isn't exactly kind of them (they create the propaganda, so they know what is really happening), but then the welfare of a billion people in an industrialized nation depends on the stability of the state. If they allow for divisions in the nation to arise, most notably in Xinjiang and Tibet, then China stands to lose strategically essential territory and resources which they require to ensure social stability and prosperity in China proper. It isn't so much about culture as it is about resources and strategic issues.
In the 19th and 20th centuries China was humiliated and almost carved up by completing imperialist powers. There is a national consensus that this cannot and will not happen ever again. Therefore the state has the public support and political will to do whatever it takes to ensure such security is in place and is never compromised. Tibet is essential to China's strategic power. They can twist the arms of their neighbouring countries because they control access to the sources of numerous rivers which provide freshwater to much of Asia. That alone is a deterrent that will keep underling states quiet, and make India think twice about stepping over the line. Such deterrence also gives China the ability to stake claims to resources that other nations might otherwise contest.
In the present day China has seen the value of soft power and cultural homogenization via popular culture. If you get your youth, especially those at risk of acting against the state, hooked on pop singers and iPhones, then people are placated and less likely to take an interest in politics or anything that would endanger the nation. This benefits the elites, sure, but then the leadership isn't completely amoral: they do want their people free from conflict and turmoil. Once you get Tibetan youth swept up in Chinese pop culture it makes controlling them a lot easier. Also, if they're educated in Chinese their kids will probably speak Chinese as their native language.
So, the PRC elites might be unpopular on the world stage, but then they have their reasoning. It isn't kind and compassionate, but then Chinese policies historically seldom ever have been. Heavy state control and firm control of the populace were part of the Qing Dynasty way of governance as well. Liberal democratic values and multiculturalism are largely seen as detrimental and dangerous.
I don't really believe China will loosen its grip on Tibet anytime soon. It will fight tooth and nail to ensure it becomes a permanent part of China, just as India will do with Kashmir. There's too much at stake to do otherwise. Cultural genocide is easily justifiable if it means a billion people or more are ensured stability and prosperity. The west had the same reasoning only a few years ago.
The Tibetans in India and Nepal maybe recognize this reality and have resigned themselves to staying permanently as a respected minority. They've built massive monasteries that are clearly not meant to exist for just a few decades. All things considered they'll be able to preserve their culture and Buddhism in India better than they could under the PRC. India automatically has to tolerate different cultures and languages, whereas China doesn't need to. Even if China became a democracy the elites and public still wouldn't budge much on the Tibet issue.
Sad, but that's the reality in my opinion.