You may have misunderstood. There would be a core set of rules that wouldn't change (basic attributes, the d20 mechanic, etc.) with additional rules and options that are continually developed over time. Developers could try out new ideas and alter the core rules using an exception based design without it becoming permanent or binding.
That's not much different than the way it is now. Except designers could be more creative and take risks without fearing a backlash from the community.
Think modular. No more editions, just core D&D and whatever expansions you choose to incorporate.
I did understand. What you did not, though, is the economical implications of that. When you publish a game, there are "Tiers" for those books.
Books in tier 1 are the core books. Every one buy those. There are virtually no D&D groups that do not own at least one copy of the Player Handbook, Monster Manual and Dungeon Master Guide (baring piracy, that is), and probably a lot of groups have more than one copy of the Player Handbook.
Tier 2 are the common player options. Things like "Martial Power", or Player Handbook 2, cater to a great degree of your player base, but not all
. Regardless of your group setting prefference, you probably would like to have a splatbook with some extra options for your core classes.
Tier 3 are settings, pure optional books, and theme books. A group of players that play in Forgotten Realms probably won't buy "Eberron's player guide" or "Dangers of Dark Sun Desserts". Optional rulings, like Unearthed Arcana, non-core class (as in: non in the first book) extra options -like "Psionic Handbook"- appeal, by definition, to a smaller amount of players than the core books. Beyond certain number, sequels of core books fall into this: PHB3 cover much less "needed" classes and races than PHB2. While there were people out there *waiting* for Bards, Barbarians and Gnomes, probably not a lot of them were desperate to have Ardents, Battleminds and Wildens. Specific thematic books (such as "guide to Cormyr" opposite to "guide to Faerun") get even less atention
So if you sell 100 PHB, that mean you would sell 70 "martial power" and"PHB2", and only 50 "Forgotten Realms Player Guide" and "psionic handbooks", and only 10 "Who is who in Waterdeep".
Past a point, the only way to keep the money flow, is to make people to buy the core book once again.
Not only that: from a design point of view, it's impossible to make one single edition "perfect". So every 5, 10 years you need to revise the system, to include new "tecnhology" and game design ideas developed through the time. AD&D did not care about Rule Consistency, becouse the term did not even exist in 1980, while 3e did. Probably "angst" sourcebooks as Heroes of Shadows did not have any purpose in 1979, but have a great amount of audiency in 2011.
Plus you have the "glut" issue. No matter of what, once you have past a point, the system becomes unbearable, and it needs a reset. Just like every now and then DC Universe has a infinity crisis
to clean up
Asking WotC not making new versions of D&D would be tantamount to asking Microsft not realeasing new versions of Windows, just Service Packs, or asking Apple not building new versions of iPhone, just OS updates.