Let me provide a timeline in hopes of giving some perspective. (I'm not sure of the exact release dates, so please excuse any errors because I couldn't find specifics on some of this on montecook.com. This is all memory.) I'm slanting this a bit to focus on some fan demand issues. This is hardly the whole story, nor am I privy in any way to what Monte and Sue decide about their business. This is a private individual and staunch fan talking.
Dec 5, 2002 - Monte's AU Design Diaries start. Excitement builds. Fans learn that it's going to be a print-only release and start demanding pdfs. Monte and Sue listen to the concerns and eventually announce that there will be electronic editions.
July 2003 (GenCon) AU release sells out in hardcover at GenCon. More books need to be flown in from the printers to meet demand. Midnight fans lobby ENWorld to get AU moved over to the OGL forums. The official fansite,
www.diamondthrone.com debuts with thousands of unique IP visits it's first month of operation. Fans demand new material.
August 2003 - Malhavoc releases 3 pdfs,
The Way of the Sword,
The Way of the Staff and
Grimoire, containing most of AU, in response to demand from poor college students, DMs whose players only wanted portions of the rules and those who wanted copy/paste ability, etc.
October 2003 - The AU DMs Screen is released in pdf before hardcover. The Player's Guide included gathers flak from some fans who insist that the additional advice on playing PCs should have been included in AU. Fans start requesting some form of "epic" AU rules.
December 2003 - The Diamond Throne sourcebook is released in pdf and DMs Screen/Player Guide in print. A significant market segment of fans insist that the Diamond Throne sourcebook should have been included with the basic AU book. They ask that it get incorporated into future releases. A different market segment - smaller - points out that they dislike the whole implied setting of the books. See
Design Diary I for a discussion of "implied setting." Fans continue to request copies of the full text of
Arcana Unearthed in pdf.
Winter/Spring 2004 - Legacy of the Dragons in pdf, Diamond Throne in print. The first printing of AU is completely sold out, and it's now well into its second. LoD is extremely well received. Fans start to ask if Malhavoc will ever put out a color version of AU and subsidiary products.
April/May 2004 - Fans requests for the full pdf of AU are met. (Illegally scanned copies have been around since the book's release. Despite those thefts, it sells.) Fan demand for a compiled AU/DT/Guide continues. Monte indicates that he'll see what he can do. Word spreads about the leatherbound PH edition from WotC that won't correct errata or contain any new material. Plenty of threads start here on ENWorld and other sites complaining about this.
August 2004 (GenCon) - Monte & Sue show some art at Meet Malhavoc Press that hints at Arcana
Evolved. The story is scooped in White Wolf Insider, apparently ahead of schedule according to statements by Monte & Mike), and fans learn about AE. (This thread starts.) The book incorporates the items that fans requested, has some epic-level rules, and will come out both in color and in pdf. It will include errata, corrections and updates and include extra material (higher page count) while costing less than buying the three separate prior products.
Present Day
So, to get up on a soapbox for a minute, how is it wrong to operate as a business by giving fans what they want? There was no conspiracy here to "milk fans" of their money. Those who bought AU already have a great product. Some will never buy the new book because they don't want the additional material or the incorporated setting and there will be threads complaining about that. But by and large a whole pile of fans will get what they want sooner than they thought they would get it. This is responding to multiple demands and requests.
Yes, there are a few who bought the AU book in the past month who may want to wait. I sure as heck would because it's only six months to February. But in the meantime, I've gotten well over $30 worth of fun out of my books. I hope everyone else has too!
Oh, and I forgot. Everyone screeched when 3.5 came out without new art. Well, gee,
Arcana Evolved has new art. What's not to like?