As a huge fan of prestige classes, let me defend them. There are four main groups of prestige classes, two of which are useful and necessary, one of which is only slightly necessary, and one of which is frivolous.
The frivolous one is the "Jack of some Trades" prestige class. Y'know, the ones like the Hospitaler that have some paladin abilities and some cleric abilities. Basically, these classes just mix and match powers from other classes, and are wholly boring. I think that every prestige class should at least have something original to it. I'm a big rules tinkerer, so a prestige class to me is a confined way to introduce new rules. A prestige class that is just a rehash of other classes is boring to me.
As a subgroup of this first one, you have the "I'm too stupid to pick my feats" classes. These ones basically just do the same thing as a standard class, with no rearranging. Maybe a few new things are introduced, but overall they can be created with the existing rules. What is a cavalier but a fighter with the right feats? What is a foe hunter but a ranger with a couple levels of rogue? I dislike these too.
The slightly necessary group includes the prestige classes that are different from existing classes, but aren't really huge changes. For instance, it takes very little to turn a paladin into a holy liberator. Just change the alignment of some of his abilities and restrictions, and you're set. I see no real need for this to be a prestige class, but rather a simple suggestion of how to change an existing class. The Candle Caster is a neat idea, but is it really that hard to say that wizards and sorcerers can take Craft Magic Candle instead of Scribe Scroll? I'm not saying these classes are bad, but they could have been done otherwise. Thus, their existence alone does not validate the presence of prestige classes.
Now, on to the two useful types of prestige classes. They are the 'Organizations' and the 'Exotics'.
Organizations are fairly self-explanatory, and I think they're the best thing to use prestige classes for in general. You choose a group that is defined by certain particular powers, and make a prestige class for it. Not every rogue or bard is a Guild Thief, not every wizard or sorcerer is a Mage of the Arcane Order, and not every Cleric or Druid is an Elemental Guardian (homebrew class). People can enter organizations from many different roads, but then they start to move along the same path. Also, most organizations have entry requirements, since only the most devoted petitioners will be accepted and trained. Thus, you have a good source for a prestige class.
Finally, there are exotics, which are my personal favorite, even though they're harder to work into one's own campaigns. Exotics are built around examining a particular type of rule or power. Rather than wholly reinventing the rules of the game, they play with them. Duelists are fighters who don't rely on armor, but on speed. Lashers are warriors who can actually use a whip competently. Frenzied Berzerkers are even more powerful ragers, but at a risk to themselves and others. Dragon Disciples are a different way to become half-Draconic. Void Disciples (from Oriental Adventures) have magic powers focused on emptiness and vacuum.
Some of these classes could easily be made into core classes, especially the non-magical ones. Afterall, it wouldn't be that hard to change a normal fighter into a duelist, just by swapping out the armor proficiencies for free Weapon Finesse and Canny Defense. It's a little harder to take a Feyspeaker (one of my classes) and make it into a core class, because the prestige class allows for any spellcaster to enter it's ranks. Do you choose to make the core class use sorcerer spells? Druid spells?
Turning all Prestige Classes into core classes causes an inflation in the number of options for beginners, one thing I want to avoid. You'd end up with over 50 core classes, which would be intimidating for new players. When they start playing standard D&D, they'll take a fighter, and realize how fun the game is, and then start buying some books before they get too high level. When they get those books, they might see some stuff they'd like to take to make their PC different. But if they had all those options from the beginning, it'd be harder to get into the game from all the complications.
Prestige classes give you an easy way to introduce less typical character roles in a package that is easy to dole out. It's also a good marketing ploy from WotC, because prestige classes are one of the most interesting aspects of game design. Look at some of Monte Cook's work for excellent usages of the concept. You'll always get people making more Prestige Classes, which will mean that you'll always have a source of new books to produce. Having more options for things people can create makes the industry more vibrant, and helps us all as a whole, even if we never find a use for most of what we buy.
I personally advocate going to a four class designation: Fighter, Rogue, Magus, Expert. The PHB could go into sample career paths for those classes, involving multiclassing and such, and so all the basic characters from fantasy literature would be covered with a simple set of rules.
Barbarian is a Fighter with certain feats that let him rage.
Bard is a Rogue/Fighter/Magus/Expert, a real jack of all trades. Take some feats for song magic, and you're set.
Clerics, Druids, Sorcerers, and Wizards can all be covered by Magus. There's no wholly balance reason to make wizards be unable to heal, so just have the whole spell list open to Magi, and let clerics be multiclass fighter/magi.
Monks as presented in the PHB would be Fighter/Magi, mostly fighter, with select spells. Most martial artists would just be fighters, though.
Rangers and Paladins are Fighters with a smidgen of Magus, and a little Expert for Rangers.
Maybe have two magi classes, one spontaneous and one prepratory. But still, you'd have basic classes to cover your bases, and then prestige classes would only be needed for exotics and organizations. That sounds good to me.
