It was either that or Fiendish Codex III: Stuff about 8 people care about. 3e was dead. Once you're into the second iteration of Complete [class] books you know the end isn't far off.
Unless they changed their business model WITHIN 3e.
The could have gone to "setting books" (create a fey realm and populate it and release the complete book of fey...player options, monsters, etc).
They could have focused on a "the way you play" series focused in different avenues of play (beer and pretzles, intrigue/mystery, politics, hack n slash, etc).
They could have released "the refined gamer's guide" which went through all the broken/power creep stuff they did and systematized/carefully errataed what was out there.
They could have released the SORD.
They could have "upped the ante" for books they already have with full size player maps on their site that could be printed and taped together for a full size battlemat.
They could have released a DMG II that was actually useful for the current game rather than expanding the rules for the game (I actually liked the DMGII). Give DMs chunks of rules for ready made npcs, plots, regions, etc. Distill it down and provide it in manageable chunks. (e.g. divide spellcasters into "types" like blaster, buffer, etc and provide spell lists for them at each level.)
What 3e did wrong (and 4e is currently also doing wrong) is that it (they) focus(ed) on broadening the game rather than modularizing and tighteing it up.
I own two large bookcases full of OGL/d20 books. When I select what I want to do for a campaign, I get an idea of what it is and then select the books I want out of my library. I may remember a feat or somesuch and use other books (no rules against it), but, by and large, I select a focus and play to that with a limited number of books. Another campaign, and I'll use an almost entirely different set of books.
WotC's model was (and is) to broaden: MORE races, MORE classes, MORE feats, MORE prestige classes. All that did (besides selling books that eventually dwindled in numbers) was to create greater imbalance/power creep and dilute the game.
I think the "everything is core" decision is a HUGE mistake. The same mistake.
Players don't really need MORE options. Heck, I've seen the thread of "I'll never live long enough to do everything in 4e". That is 1 year into its lifespan. More breadth will not help that person. What players need is for the options they currently have to become more exciting (read: not more powerful, more fun). So, how do you 1. sell books and 2. make things more fun without providing more options?
Power cards are a great example. Character builder is a great example. SORD is too. Make the game easier to play. Give maps, sell tokens, markers, and other ways of keeping track.
Very simply: find the problems and make the problems go away. IMO (a huge fan of 3e) the biggest problem with 3e was the imbalance of a huge number of options, many of which were "broken". Instead of addressing this chief problem, as I've mentioned above, they pumped more books (like complete champion, phbII, etc) into the market and exacerbated the problem, making the game less playable.
There was plenty of room to make 3e better (see Paizo's Pathfinder for an attempt...opinions will vary as to how well it's being done) without making 4e.
All that said, I'm not saying it was bad that they made 4e. But I am saying it wasn't their only option.
