I've often seen people talk about how third party publishers failed to support WotC or D&D, something I think Charles Ryan first floated here on EN World back when he was still the D&D Brand Manager. [. . .] That was no more a "betrayal" than WotC designing a new edition of D&D. . .
To be clear, I never held that 3PP betrayed or failed to support WotC. (Nor did I ever feel that 3PP owed any loyalty to WotC or obligation to support WotC or D&D beyond the terms of the OGL and d20 STL.) What I observed is that WotC left holes in the marketplace, and many 3PP, rather than exploit those holes, chose to make products that competed directly with WotC's products.
That's not just bad in the OGL context--it's bad in any business context. Smart businesses look for opportunities and points of differentiation--they don't attack their competition's strengths (unless they're in a position to really win). When consumers already have good, solid choices in one product category, why pile on to that category when the need for a different type of product is unfulfilled?
Which brings me to why this is still relevant: Lots of people have observed that the GSL is designed to let WotC "regain" control of their brand and IP. That's nonsense--control of the D&D brand and IP has never been under threat. What WotC wants to do (in my no-longer-an-insider opinion) is put some controls on the market; in particular, to only open D&D compatibility to 3PPs who make products that complement (rather than compete with) WotC's products.
Is this because WotC fears the competition? No. The most successful OGL products of all time made only the tiniest blips on the WotC sales radar. If anything, a rising tide of quality D&D products drives consumer interest and floats all boats, including WotC's (which of course is part of why the OGL was created in the first place).
It's because WotC fears the glut. When an unrestricted number of companies creates an unrestricted number of products in an unrestricted range of categories (
especially categories in which WotC is strong), the inevitable result is a huge glut that sucks revenues out of the sales channels and creates a swath of destruction. Consumers and retailers are confused about which products to buy, so they dabble in a range and end up with a lot of stuff that doesn't sell. Huge amounts of revenue is tied up in dead product--revenue needed to order new product or simply pay the bills. Shops close (nearly half the core hobby shops in the US shut down over the past five years--admittedly, there are other causes, but the RPG glut was a very real contributor); those that stay open order less and less new product as they see old product stack up.
So WotC changed the terms of 3PP compatibility with D&D, and made it more restrictive. Insofar as it controls the glut and keeps 3PP focused on products that players actually want and don't get (or don't get enough of) from WotC, more restrictive is good for the RPG business as a whole, it's good for WotC, and frankly it's good for the third-party publishers. And if it also means that a relatively small number of 3PP participate (currently 3 to 5, as opposed to hundreds under the OGL), so that the choices offered to consumers and retailers are relatively narrow but desirable, so much the better.
(Whether WotC did this well is not part of my argument; I leave that to a different discussion.)
(A side note: When I generalize about the behavior of 3PPs, I am, of course, generalizing. Obviously there are exceptions; I'm not pointing any fingers at specific companies. Offender or innocent: you know who you are (and odds are it's reflected in your level of success).)
(Hi, Nik!)
Note to Self: send Pramas a message to "bland up" his blog posts. Or more doublespeak. See WotC posts of pre-GSL release posts on ENworld forums for examples. 
