First, I don't think Paizo would have been able to develop or host DDI. So that's probably a non-issue. As far as allowing Paizo to keep Dungeon and Dragon: I don't think it would have been economically feasible or beneficial for either WotC or Paizo to do so, considering the plan of making it an integral part of DDI.
I'm not sure I agree here. With the right programmer, it doesn't have to cost a lot to build an application like that. I've known programmers who've created much larger and more complicated systems than DDI. That having been said, I guess it depends on how many resources you define as "a lot"......development budget of $30,000? $300,000? $3,000,000? What could Paizo handle?
As far as Pathfinder, maybe Paizo wouldn't have developed it or maybe they still would have, but I don't think it's a factor. Pathfinder has not stolen players from 4E and is not a competitor of WotC. Pathfinder came out well after 4E...and well after the fan base was already polarized. I think people that picked up Pathfinder (for the most part), were those who had already decided they didn't want to go the 4E route, but still wanted 3E support. WotC has lost nothing because of Pathfinder. 3E fans have gained significantly because of Pathfinder. Not necessarily a Win-Win, probably more of a Win-Didn't Lose scenario...which is probably all that really matters as far as WotC is concerned.
I can only speak from personal experience here. I know I waited before buying into 3E. And I waited with 4E. I wasn't enamoured of the changes I was reading about....but in my area, everyone seemed to be moving over. Then Paizo announced their plans, and released that first beta, and I decided instead of biting the bullet and buying into 4E, I'd wait and see if Pathfinder was any good. When the successive betas came out, and I had a chance to see the changes, I was hooked. If it hadn't been for Pathfinder, I'd have bought into 4E at some point. Now I don't have to.....and that's pretty cool!
Banshee