Well, certainly some brand dilution has occurred for those who would call any sword and sorcery gaming "D&D" but it's interesting that generally for most people "D&D" at least refers to all of the editions published by TSR/WotC. So it seems that since the various editions represent such divergently different games (I doubt anyone would try to claim (O)D&D and 4E are easily compatible), it may just be that they have diluted their own brand in many of their own best customers. I hadn't thought of it that way prior to this thread.
I wouldn't say that to be the case, exactly.
To me, it is similar to something like the Windows operating system (bear with me, I have a point).
There is a version and over time they release newer versions while older ones get phased out through no longer being produced/supported (3.x, 95, 98, xp, me, vista, 7, nt, etc.)
Yes, each version has some problems and things that work well. You have people that are fans of one over the other versions. When people refer to "Windows" they're referring to the operating system as a whole, or a specific version (perhaps the most recent, perhaps the one being used at their house/office, etc as determined by the context of the conversation) But would you say that Microsoft diluted their own brand? Or is it really just different versions of the same thing that's evolved over time (for better or worse)?
If you ask any "non-techy" (like, my parents) it's all "Windows" with no distinction beyond how it might look and what you have to click. They don't know any details to understand that they all work differently or that they wouldn't work together at the same time.
I'd say it's a little brand dilution by virtue of the fact that the word D&D can refer to more than one definition (the particular definition being defined by the context of the conversation). However, in my mind, for the most part I just chuck it up to different (albeit incompatible) versions.