James Heard said:
I mean, if you change Coca-Cola by diluting it's consistency and quality and another cola company comes out there with your old employees and starts making Coca-Cola like everyone likes it then you've effectively shot your brand name in it's foot in the interest of checking your bottom line.
Actually, something similar to this happened with the New Coke debacle at the height of the Cola Wars. (Unfortunately, this example goes against what you were trying to prove with yours.)
Pepsi and Coke had been fighting for market share for years, and by the 1980's Pepsi was winning by a considerable margin. Coke had just created Diet Coke, not by taking the sugar out of regular Coke, but by formulating an entire new drink that was diet and still tasted like Coke. Diet Coke was the #1 selling diet drink, but even with those sales, Pepsi was still outselling Coke by a large margin. Coke decided, "If Pepsi is what people want, then Pepsi is what we'll give them." They discovered that if they replaced the nutrisweet in Diet Coke with High Fructose Corn Syrup, it tasted almost exactly like Pepsi. So that became New Coke.
When the Coca-Cola co. did their research on the product, they found that in blind taste tests, people picked new Coke a lot more than either Classic Coke or Pepsi. They were sure they had a winner. So sure, in fact, that they decided to stop making the old formula of Coke after they announced the new Coke (I can still remember the announcement, so I guess that kind of dates me, huh?

) And after they announced the New Coke, there was a huge public outcry. How could they change Coke? It was one of those things that was supposed to stay the same forever. Despite numerous blind tests to the contrary, nearly every Coke supporter came out saying how much the New Coke sucked. And the biggest coup of the Cola Wars came when Coca-Cola announced a return to classic Coke, and Coke's numbers immediately shot past Pepsi's.
So here's my point. People didn't gate New Coke because it was bad. They hated it because something had happened to the brand. And when they began to buy it again, they didn't do it because Coke had gotten better tasting. They did it because of the Brand. Quality had nothing to do with it. The content had little to do with it. You might say, "Yeah, but soft drinks are a little different from RPG's, " and you'd be right. But what this says about human nature doesn't change.
People care about the name brand. Why else would so many internet companies spend so much money trying to burn their brand name into people's heads? If Skip Williams, Jeff Grub, and Stan! all go form their d20 companies, a few people will be immediate supporters, because to us, those names already read like brand names. But most people don't even look at the title page of their DnD sourcebooks, and have no clue who wrote them. They bought the books because they said "Dungeons & Dragons" on them, and they would have bought them if they had been written by Monte Cook or if they had been written by Joe Nobody.
Dungeons & Dragons is the singlemost recognizable brand name in the RPG industry, followed closely by the Forgotten Realms. Unfortunately, Hasbro knows this, and they also know that as long as they keep putting out products with these brand names on them, people will keep buying them. Sure, they might lose a few of their more fanatical supporters if the quality continues in a downward spiral, but when the average reading level across the country is 7th grade, they probably don't have to worry about the majority of the public being too picky. Dungeon's and Dragons is not dead, at least not physically. Spiritually, however...
I share in the feeling that is was an immensly bad move for WotC (read, "Hasbro") to lay off (or force to leave) so many of their best creative people. I have played D&D for more than 2 decades, now, and I have many of the original products Skip and Jeff wrote. I am no longer worried about Hasbro selling D&D. If they did that, it would probably be the best thing for the hobby. I am now worried that they will hang on to it, and squeeze all of the creative talent out of it until it is a lifeless husk, kept alive only on the merit of its brand name. Because as long as the game is called Dungeons & Dragons, it will continue to sell regardless of how dubious the quality is.