This, I could understand, but I was always under the impression that 'fragmenting the fanbase' was something presented as bad for D&D as a game, not just as bad for TSR/WotC, which is why the OGL, which ran the risk (at least) of creating this same problem over again, seemed to conflict.
But it's possible I'm putting the worst possible construction on it--I don't particularly trust Ryan Dancey, I don't care for what I perceive as his vision of the D&D game (which sometimes strikes me as an unholy hybrid of the RPGA and the Borg Collective), and therefore I may be judging it in the most negative light.
I don't recall hearing anyone say fragmenting the fanbase was bad for the game, except indirectly in the sense that TSR going out of business would be bad for the game; all the criticism I've heard has been directed at the business side of it. It's the worst of both worlds, business-wise. You get the overhead of a big company, but not the economies of scale.
And while I'm sure many of the products had respectable sales, gross sales figures are not all there is to success. (Besides, while Dark Sun may have been successful, what about settings like Maztica?)