My answer is yes, and no.
I think it would be wonderful if WotC could actually put out one book a year and remain profitable, but that's just not the case. D&D would soon be cancelled if that were their approach. Generally speaking, the number of people that buy something declines over time - I'd bet good money that the core books are the same, and the supplements are even worse. After all, not everyone does buy every book, though certainly some do. Now, do I know how many books WotC needs to put out a year to keep up a good baseline of customers? No, obviously, since I don't have access to that information. If I had to guess, I'd say it would be between eight to twelve major products per year - which is about what we get now, I think. That would be "no."
On the other hand, I definitely think that there is room for improvement and innovation over at WotC. The tough thing about that is pleasing enough people enough of the time. What balance I might like to see, regarding campaign vs. generic and flavor vs. mechanics, isn't necessarily the same as anyone else. So, with the caveat that this is all my personal opinion, I think that there's been too much of a shift towards generic mechanics, as opposed to generic flavor, in non-campaign books. Similarly, I think that there needs to be a little more work in taking all the mechanics (prestige classes, feats, spells, so on) and finding their place, if any, in campaigns. In that sense, there's a lot of campaign flavor, and not so much in campaign mechanics. Dragonmarked is a very notable exception to this, and I feel it necessary to point it out.