It's been stated in a few articles that Pathfinder is now the #1 selling RPG. If that is true, (I can't independently verify it), then it doesn't matter if Paizo is doing well for how big they are or not. It's still doing better than WotC when it comes to the Pathfinder / 4E divide.
How is it not true that the 3.5 years it was the sole edition means it wasn't successful? Do you really think that if Hasbro and Wizards were making money like they expected and the players embraced the system, they'd have scrapped it already? Based on previous experience, no, no they wouldn't have. They would strap the saddle on and ride it into the ground.
Now, going forward, their options are to either A) try and recapture the people they lost and make a system they will enjoy and potentially lose the 4e Neo-Grognards
D). B) Build off of 4e and keep the playerbase they have now, which doesn't appear to be enough of a market to satisfy their sales numbers C) Hope to hades that they can make a system that appeals to both.
I think you'd find it HIGHLY informative to read Ryan Dancy's column here, as well as all the interviews you can find that have been online in the last several months by WotC people. I think it makes the whole picture much clearer in some respects.
The short of it is that WotC has known for half of forever that each new edition sells well for a while and then tapers off. Basically core books are by far the thing that sells best, the better supplements may do reasonably well too, but overall ongoing support for existing editions after the first several years is not making you a ton of money. They also know that the audience is getting older and smaller overall. The game has simply NOT been bringing in new people fast enough to replace old players for a long time. Each new edition sheds a few more holdouts and does a bit less well than the one before it, but if you stop putting out new editions, you don't have a viable business.
This is all what motivated WotC to put out 4e in the first place. The realization that the game has to shift its emphasis and change in some ways to keep appealing to a new audience. SPECIFICALLY their goals for 4e were to have an edition that was "digital friendly" (IE can be incrementally built on and material can be presented in things like DDI tools, etc) and provided less prep work and system mastery to play and enjoy. Additional features include improved human factors (cleaner presentation, more work frontloaded onto char gen vs table time, greater consistency for easier learning, etc).
In order to sell all of this to management (and there's a long and sordid history of why this was necessary) they had to establish that they could increase sales to the 'major product line' level within Hasbro (and this is sales of the actual game itself, not even counting any other stuff like novels, video games, etc). Effectively it is an impossible goal. At best it could be achieved only with perfect execution and a highly optimistic uptake of DDI. Regardless of what 4e looked like it was effectively never going to do that.
Notice that Paizo really doesn't factor into this. Whatever level of success PF has had, and nobody is arguing it isn't successful, WotC making basically PF themselves wasn't going to fulfill their goals and probably wouldn't have been funded. Nor is PF so different from 3.5 that it probably would have been very palatable to existing customers as a version roll by itself. It would have just been more of going down the same track that the game has gone down for 30+ years and they already know in the long run that leads nowhere.
Now, maybe without the existence of PF 4e would just continue on for another several years and be a 7 or 8 year edition instead of a 5 year one. Who knows? At some point they'd still be looking at the situation and still seeing they needed to do more, and doing basically what they're doing now.
Overall it doesn't matter. 5e needs neigh 100% uptake and pretty much perfect execution. So it is not going to succeed if it is the "trash the 4e direction" edition. Nor is it going to succeed if it doesn't work out the limitations of 4e. It MUST do both, or else it is actually worse than doing nothing in every respect. That's the long and short of it, and you can do the research and find the information that will back that up. They've worked themselves into a corner and thus WOTC at least cannot choose to support only one group of player's desires and not another. There's a REASON why this is the "unite them all" edition, because if EVERYONE isn't going to buy in, then its game over. I don't know what happens to D&D in that case, but presumably it doesn't involve the people who work on it now having jobs anymore, lol.