Sure they could. They just say that from now on they will produce modules that can be placed in a variety of D&D settings. While Greyhawk was the default 1e setting, by no means was it a problem to put those modules anyplace else. They were designed that way. In fact, often they'd give you multiple locations to put a module in Greyhawk itself.
I'd produce a new campaign setting every three years. I'd keep them all in print so long as anyone kept buying them. PDFs forever of course. Maybe print on demand too. I might even allow for new stuff to be produced for the most recent three settings.
I think one thing lacking in D&D also is very well defined cities like Ptolus. To me that is the ultimate city book. I wouldn't have to have the adventures necessarily.
Edit:
By the way Pathfinder and I believe RuneQuest chose the latter. They've settled on Golarion and Glorantha. I think D&D is big enough though to try the former.
The only other option to me would be to just have one setting and never deviate from it. Kind of boring. Not very creative but over time a group could collect everything. Every town eventually gets detailed.
I think that strategy is completely non-viable. WotC seems to follow something a little more rational. They simply support at some level pretty much all the old 80's/90's TSR settings, at least the main ones. FR, Greyhawk, DS, Kara-Tur, (I can't remember anything done with DL, but maybe there was). They've created exactly 2 new settings, Eberron and 'PoL' (though the later is more of a side-effect than a plan). Each setting goes fallow for a good while, getting a refresh maybe once a decade, or even less in some cases.
It makes sense. They avoid constant rehashes and fan angst, and yet keep restoking the fires of fandom for each setting. I just think that FR is uniquely possessed of a kind of rabid nit-picky fanbase that might best just be avoided. Certainly 4e would have done better to just not touch it. Instead they could have done a nice Kara-Tur or even Dragon Lance reboot. Either one of those would have been substantially less fraught and left a lot more room for reinterpreting the setting in 4e terms. Eberron was, by all accounts, a good solid 4e success, and DS worked GREAT.
Kara-Tur for instance could have done the 'Swordmage' with slightly different color, and the various themes and whatnot that were the 'OA' of 4e, plus a nice new look at a lot of oriental races and monsters, published a nicer modern KT map, and some interesting modules. 4e is uniquely suited to 'wire fu' and would do the old OA 'clan centered' sort of play perfectly well. I think that would have kicked serious butt.
I'm pretty vague in my knowledge of DL, but there's a lot there, and the lore, IIRC, covers a bunch of different time periods and setups, but its all 'epic fantasy'. It could have been pushed out as the world that concentrated on epic tier play. Obviously you'd have to support heroic/paragon, but it would be a great setting for epic stuff. PCs taking on armies of evil dragons, etc. Recast the 2 sides as basically a version of Primordials vs Gods, it would work well. No doubt there are some picky DL fans out there, but if its set in one of the more obscure time periods I think it work, plus the fandom is a little less crazy since it has been starved of material for 20 years.
I wouldn't touch Greyhawk with a 10' pole, for the same reasons as FR. It would just piss someone off, and its been done to death anyway.
I think they would have been smarter to license out to 3pps to produce additional settings, and make a deal where each one could introduce a race, a class, a line of feats, and some items, plus maybe one minor new thing. That would have all gone into DDI, win/win. WotC was so lamely unimaginative in its handling of all those possibilities.