Orius said:
Because like you said, WotC doesn't want to fragment the market. Sure it is a shame to see many of these settings, some of which had great ideas, fade into obscurity, but there's also the fact that too many settings led to the demise of TSR.
WotC is already fragmenting their market with the twin Realms and Eberron lines. The "not supporting multiple lines" bit also came from Ryan Dancey's famous open letter about the dawn of 3rd Edition, that same email also said that WotC was going to pour a fortune into the RPGA to turn it into a huge gamer support and networking system (not quite), and that Ravenloft was discontinued because it was overshadowed by White Wolf (which got the license, and now they don't, leading to this whole thread).
I for one won't touch a book labelled Eberron, spellpunk, banally-common-magic, created-by-focus-group feel, a whole new core class devoted to cranking out magic items (which D&D has too many of already), non-genre robot PC's (without ECL!), cities of skyscrapers with magical railroads and the like. I know players who are just the same way with Forgotten Realms, seeing it as nothing but overpowered books with insanely powerful NPC's who steal the spotlight from PC's and they buy everything D&D except the Realms. Other players I know refuse to buy anything from any WotC setting, but buy all the "Generic" books like Completes and Bo?D's.
The fans of older settings know that one way or the other they are never going to get full support, but one hardcover. Why did Wizards make Ghostwalk, a setting book for a one-shot that they didn't intend to revisit, or publish the Dragonlance setting book under their banner while letting Soveriegn Press (look carefully, the DLCS was published by WotC, although it was written by SP) if they didn't want to have multiple lines. They haven't been entirely consistent on this "not splitting the market" thing.
It also has nothing apparently to do with competition for D&D. Some companies have tried to get the license for Dark*Matter to do a d20 Modern version, only to be strongly rebuffed by WotC, they're not licensing out even their non D&D settings. It's hardly about splitting their D&D market in that case.
Manual of the Planes was hardly anything for Planescape fans. There was almost nothing new in there to a PS fan, and most of it's material was a rehash of the old 1e MotP. After I bought it. We had a rich, detailed planar environment which was a setting unto itself, and it was replaced with a generic Hardcover of the Month retreading 1e material with a few token mentions of PS specific things.
Making almost a dozen product lines isn't what killed TSR, it's trying to support them all simultaneously. When TSR was in one month producing books for Planescape, Forgotten Realms, Dark Sun, Birthright and Spelljammer, not to mention maybe a generic sourcebook then it was dividing the market. Right now, it's generic/core suppliments, Eberron and Forgotten Realms.
Even when they have a chance to revisit an old setting, they denied it in favor of yet another setting. Kara Tur was the traditional eastern-themed D&D setting, but when the 3e Oriental Adventures came out, we got Rokugan instead as the default setting, with a heavily supported 3rd party Rokugan line too. Now for Eastern-style D&D among gamers, you have those who prefer Rokugan and those who prefer Kara Tur, they've split an already split market.
It's not a sensible marketing decision when they can squirt out "Weapons of Legacy" which will only appeal to a limited chunk of players, when they have properties gathering dust which are guaranteed to sell big (at least for the first book) from old fans. Doing one large hardcover setting book for the most popular settings is a way to cut the risk of failure, while cashing in on the large amount of nostalgia they have in certain quarters. A Planescape or Dark-Sun one-book Campaign Setting would certainly sell as much as the latest generic miscellaneous splatbook (given the vehement enthusiasm in some quarters for Planescape or Dark Sun, there's got to be at least as much support for it as Races of Destiny or Weapons of Legacy). Yes, there are people who will avoid a single hardcover like the plague, but there are also people who avoid the Environment, or the Racial, or other books that come out.