I think there is a lot of truth in that, though I've heard others point to Blue Cheer or the Sonics as other punk godfathers. I've also heard people say that LAL is the first heavy metal album.
One writer said that had The Who made subsequent studio albums with the power and volume like that on Leeds, they'd have had more financial success, akin to Zeppelin. Instead, they made Who's Next (or, more properly, tried to make Lifehouse and produced Who's Next from the wreckage) which was definitely NOT like Leeds.
I concur in part. Who's Next gave us arguably two of The Who's most popular tunes (Baba and WGFA) and (I believe) it is their best-selling album. But if we'd never heard The Song is Over, Love Ain't for Keeping, and Getting in Tune I don't think we'd have missed much. (Personally, I can't stand Behind Blue Eyes and to make me an even bigger minority, on some level I prefer The Who By Numbers to Who's Next.)
I also suspect that had The Who continued in the Leeds manner, we'd have never gotten Quadrophenia which is my Desert Island Disk. Thus, I'm ok with Leeds launching a genre but The Who going in a different direction.
IMHO one of the best songs from "Lifehouse" that didn't make it onto "Who's Next" is "I Don't Even Know Myself", just a great song. And the Isle of Wight version is fantastic.