LAFF,
Military service doesn't guarantee success, nor does a lack of it guarantee failure. You're right in saying that a large number of folks that fly at the airlines have military service, however there are IMO, just as many that came through the civilian routes- particularly at the regionals and smaller/newer national/major airlines.
As time passes (and the vietnam era pilots retire), I would surmise that the ratio of military background to civilian only background pilots will change dramatically.