It's my personal belief that WotC had the impression that the DnD fanbase was theirs to do with as they would, and that there was no alternative to 4e. If they had an actual appreciation fo the fact that one (or more) of their OGL ecosystem would defect and cannibalize heir 4e migration with a successful OGL follow-on, then WotC might have moderated their "dramatic thought leadership" in 4e, and actually produced a product that the majority of their existing customer base might have found more appealing.
I have my doubts. I find it hard to fathom that WotC couldn't see the competition they face from their own old products much less the products of other companies. Now, maybe they had fallen into a bit of a thought pattern based on the success of 3e's launch, that the success of 3e under WotC's stewardship did very well so 4e would as well. But that doesn't ring very true with me.
My guess would have more to do with the designers trying to come up with a game that worked well for their easiest-tapped feedback source, organized play, assuming it would be sufficiently representative to base a game around for the general market. 3e had gone through some pretty strict limiting to support Living Greyhawk in a reasonably balanced fashion. 4e has clearly been designed to make the sort of balance you want in organized play a central focus.
I think that may be a bit of a limited scope, personally, but it does serve to make a pretty robust skirmish subgame within D&D. I think that the designers made their choices honestly thinking they'd be good for the game, not because of some arrogant idea that their disgruntled (former-) customers would have no place to go. Most of the designers at WotC, I'm sure, play more than one RPG. They would
know quite well that competitors (including their own previous editions) would exist even if they didn't know Paizo would become one of them.
I also think that there's a separate element at WotC, let's call them the business management side of things, who moved to keep WotC intellectual property home on the farm rather than releasing it for anyone else to run with. I think it's probably the business management end that is responsible for the GSL trouble and probably withdrawing PDFs from sale.
I can see why, taken together, one might see these moves indicating a certain arrogance, an entitlement to their base of customers who would follow the brand no matter what. But I really do think it's a stretch. I have no reason to believe the designers weren't honest and forthright in their attempt to improve the game.
Now, if WotC had correctly divined what would happen with a chunk of the fan base and Paizo, what would they have done? I honestly don't know. The designers might have designed the game for a little more backward compatibility, which would have been pretty easy to do with the flavor side of things if not mechanics. I have my doubts that the business side of things would have changed much, though.
