A good argument can be made for WotC being the wrong-sized company for the D&D brand right now.WoTC is in kind of a no win situation, in that they're almost too big for the D&D brand to be SUPER sucessful.
As for Paizo's effect on 4e... they wouldn't have had any on my experience w/the system. While I hear Paizo makes great products, they simple aren't the kind I'm in the market for (I homebrew adventures and setting exclusively).