Well, yes, and the Russians were able to divert all their war effort into building a massive army to destroy the germans on a tank rush, just like a RTS game. I agree that it's pretty much innefective into bringing down the industry, since the german war production didn't decrease that much until the very end of the war. It didn't go up, however.
EDIT: Another thing is that bombing cities was considered then, and still is now, an atrocious thing to do. It's quite surprising the western allies got away with that. The opposition to it was supressed, but we still know it was there. Tolkien, I believe, was very disapointed by the notion the RAF was carpet-bombing cities.
Maybe that was not a major fault of the Luftwaffe, but I still thinkg some long range bombing missions to attack the factories of an enemy might do some good, but it wouldn't win a war. Perahps just make their lives more difficult a bit.