Corinth said:
A DM needs to know those same basic rules, have a basic familiarity with those special abilities and a similiar familiarity with the combat rules. He can wait for the XP and treasure rules until he needs to deal with them. However, what he needs most is the understanding--one shared by the players--that he is new to the game and as such he ought to take it slow and keep it simple until he gets the basics. This ought not to take more than a session or two, especially if he reads the PHB & DMG as he ought to do.
Here's the problem with the position as I see it: That's putting a LOT on that first-time DM; if the game is to grow, not only does it need introduction via existing groups, it also needs a way to introduce players by itself. It needs a self-contained introduction, because only the most dedicated person could take all three rulebooks and learn the game without any outside influence whatsoever.
Also, you have perception, which can be more powerful than reality. Gamers who like the idea of D&D, but who are put off by the confluence of rules, may be more disposed to try a D&D with the same core concepts, but fewer options, strange though that might sound. WotC may have realized a need to want to tap into a still sizeable market out there who play older editions of AD&D, and as such have no reason to buy new products. A new Basic might be used to woo players who are put off by those things which most d20 players find attractive - namely, the options. (I've learned a lot schlepping around Dragonsfoot.org.

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This is the very market that smaller companies are still dying to capture, and it's possible that WotC releasing this about the proposed time of Castles and Crusades is not an accident, as someone pointed out. Any small company could give their right arms to have a force of up to 30 to 50 thousand fans (as an estimate) who return to buying current D&D material by way of their game. If it's good enough, and it captures the imagination enough, a small publisher's product could grab many players who prefer a DM's adjudication to large numbers of optional rules.
(My estimate, by the way, comes from the 25,000 to 30,000 sales figures for the Hackmaster Player's handbook, and the fact that there are a lot of people I've corresponded with either bought HM because they were looking for a d20 alternative, or who didn't buy Hackmaster because it didn't capture the feel they are looking for. It's an arbitrary figure, to be sure, but one I feel is justifiable.)
So, does WotC need a Basic set? Maybe not, but their desire to grow the game outside of the traditional channel is worthwhile. The 3.5 Rulebooks are definitely not attractive for brand-new gamers without exposure to the "Gamer Network."