True, but if the lines were split, that means WotC would have ALSO had that much more trouble as well. Worse than TSR.
For example, If I am Buster, and I have 20 dollars...I can only buy one book. I have a choice of 10 campaign lines. I buy one, the other 9 lose out. If that is TSR, they gain 20 dollars, and don't sell 180 dollars of product.
Take that as WotC. I am Buster...I have 20 dollars...I can only buy one book. I have a choice of 50 campaign lines. I buy one. The other 49 lose out. If it is WotC, they gain 20 dollars. They lose 180 on the other lines they are selling (Because they still have a bunch of books from other campaign settings for sale). The others also go out of business.
I dislike that this entire story is that TSR splitting the campaigns is what sunk it. It isn't. WotC's actions even show they didn't even believe that piece of hokum.
It's not even a hidden secret. These things are out there and even discussed (or at least some of it has been). The book deal and relying on those funds as set hard finances is something that has been mentioned quite frequently. That is probably a MUCH bigger deal on what sunk TSR than having put out multiple campaign settings. It wasn't the multiple campaign settings themselves being put out that was the problem.
If it were, WotC would not have been continuing to do so with ever edition ever since.
It is the financial decisions made BEHIND that support and HOW that support is done which can be problematic. If you are making a module for a line that had it's last product sell 8k units, than it would be dumb to print 20k...most likely. You MIGHT turn a profit if you sell 3k, but it might be smarter just to release a new creative setting instead (yes, that might split the line, but it might also sell better than a dying product line). Printing 20K then is a financial decision, NOT something really related to "splitting" the line. I don't see a causation between the release of campaign settings and cannibalization of product.