1) The Forgotten Realms was popular from its inception in late 1e when there wasn't a tonne of lore and there was a lot of blank stretches to the world.
2) WotC churned out a LOT of material for the Realms in 3e, so it seems unfair to say they will "always fail".
WotC was *never* in the business of books. Or at least not anytime worth remembering. MtG makes more money than D&D. In fact, if you took all the money WotC has made from D&D and book sales since the beginning of time and threw that in a single big pile, it'd probably only be 18 months of decent MtG profit.
They're a collectible trading card game company. They just happen to be a CCG company that occasionally did books on the side. And now they've moved to being a CCG company that manages other people making books on the side. Books have always been vestigial.
Yeah,WoTC was "never" in the business of books:
Especially none of these:
Players Handbook
Monster Manual
Dungeon masters Guide (I'm pretty sure none of these three ever sold significantly)
Arms and Equipment Guide
Book of Challenges: Dungeon Rooms, Puzzles, and Traps
Book of Exalted Deeds
Book of Vile Darkness
Cityscape
Complete Adventurer
Complete Arcane
Complete Champion
Complete Divine
Complete Psionic
Complete Scoundrel
Complete Warrior
Defenders of the Faith
Dieties and Demigods
Draconomicon
Dragon Magic
Drow of the Underdark
Dungeon Survival Guide
Dungeonscape
Elder Evils
Enemies and Allies
Epic Level Handbook
Exemplars of Evil: Deadly Foes to Vex Your Heroes
Expanded Psionics Handbook
Fiend Folio
Fiendish Codex I: Hordes of the Abyss
Fiendish Codex II: Tyrants of the Nine Hells
Frostburn
Ghostwalk
Heroes Builder Guidebook
Heroes of Battle
Heroes of Horror
Libris Mortis
Lords of Madness
Magic Item Compendium
Magic of Incarnum
Manual of the Planes
Masters of the Wild
Miniatures Handbook
Monster Manual II
Monster Manual III
Monster Manual IV
Monster Manual V
Oriental Adventures
Legend of the Five Rings Campaign Setting
Planar Handbook
Player's Handbook II
Psionics Handbook
Races of Destiny
Races of Stone
Races of the Dragon
Races of the Wild
Rules Compendium
Sandstorm
Savage Species
Song and Silence
Spell Compendium
Stormwrack
Stronghold Builders Guidebook
Sword and Fist
Tome and Blood
Tome of Magic
Unearthed Arcana
Weapons of Legacy
* This list doesnt include ANY of the Forgotten Realms books they published
4th Edition Core rulebooks
Dungeon Master's Guide
Monster Manual
Player's Handbook - Arcane, Divine, and Martial Heroes
Roleplaying Game Starter Set
Supplement books
Adventurer's Vault
Adventurer's Vault 2
Arcane Power - Options for Bards, Sorcerers, Swordmages, Warlocks and Wizards
The Book of Vile Darkness
Character Record Sheets
Dark Sun Campaign Setting
Dark Sun Creature Catalog
Deluxe Dungeon Master's Screen
Demonomicon
Divine Power - Options for Avengers, Clerics, Invokers and Paladins
Draconomicon: Chromatic Dragons
Draconomicon: Metallic Dragons
Dragon Magazine Annual 2009
Dungeon Delve
Dungeon Magazine Annual 2010
Dungeon Master's Guide 2
Dungeon Master's Screen
Eberron Campaign Guide
Eberron Player's Guide
Forgotten Realms Campaign Guide
Forgotten Realms Player's Guide
Halls of Undermountain
Hammerfast: A Dwarven Outpost Adventure Site
Into the Unknown: The Dungeon Survival Handbook
Manual of the Planes
Martial Power - Options for Fighters, Rangers, Rogues, and Warlords
Martial Power 2 - Options for Fighters, Rangers, Rogues, and Warlords
Menzoberranzan
Monster Manual 2
Monster Manual 3
Mordenkainen's Magnificent Emporium
Neverwinter Campaign Setting
Open Grave: Secrets of the Undead
The Plane Above: Secrets of the Astral Sea
The Plane Below: Secrets of the Elemental Chaos
Player's Strategy Guide
Player's Handbook 2 - Arcane, Divine, and Primal Heroes
Player's Handbook 3 - Divine, Primal and Psionic Heroes
Player's Handbook Races: Dragonborn
Player's Handbook Races: Tieflings
Player's Option: Heroes of Shadow
Player's Option: Heroes of the Feywild
Player's Option: Heroes of the Elemental Chaos
Primal Power - Options for Barbarians, Druids, Shamans and Wardens
Psionic Power - Options for Ardents, Battleminds, Monks and Psions
The Shadowfell: Gloomwrought And Beyond
Underdark
Vor Rukoth: An Ancient Ruins Adventure Site
Wizards Presents: Races and Classes
Wizards Presents: Worlds and Monsters
Essentials books
Dungeon Master's Kit
Heroes of the Fallen Lands
Heroes of the Forgotten Kingdoms
Monster Vault
Monster Vault: Threats to the Nentir Vale
Rules Compendium
5th Edition:
Players Handbook
Monster Manual
Dungeon Masters Guide
Hoard of the Dragon Queen
Rise of Tiamat
Princes of the Apocalypse
Out of the Abyss
Sword Coast Adventurer's Guide