But it can result in poor gaming material.
WotC spent a lot of effort on story element design for 4e (see eg Worlds & Monsters) and seems to be spending a lot of effort for D&Dnext too (see eg Wandering Monsters).
A bad story element is not going to unbalance the game, and people are more likely to ignore it rather than seek it out for exploitation.
I don't disagree that bad story should be avoided and care should be taken to produce high quality monster and world lore, but it requires far less editng and development passes.
Putting to one side the quality vs quantity issue - I personally think there is a lot of quality in the 4e books - from WotC's point of view why is it a problem that the edition doesn't last so long? They are interested in revenue per time period, not endurance of editions. Unless there is evidence that edition churn hurts revenue. Is there?
I'm not saying that WotC books were low quality. Or that 4e was low quality. There was a LOT of great material. But there was also a lot of just okay material. And some just plain bad material. Because there was just so very much.
Really, I'm just saying that the overal quality could have been higher during late 3e and early 4e by focusing on fewer must-buy tentpole books rather than more kinda-okay books.
Edition churn. Without having a look at WotC we can' the certain, but they have said in convention panels that a long edition can be profitable.
The thing is, making a new edition takes time. A couple years where in-house staff is not making money. Even if they continue to release products, like during the 3e to 4e transition, they're relying on freelancers which so costs are still up. By the time the edition releases the company is in the hole.
While most books need to just recoup their immediate production costs to show a profit, the first few books of a new edition also have to pay for two years of development time for a handful of people. The longer an edition can last as a sustainable product, the more profit the initial books generate.