The other and much better option is to expand the RPG market base. More players and more DM's means more books sold all around. I also see elements of this strategy in WotC's recent move to 3.5 and connecting the game to the minis market. This accomplishes several things. It allows WotC to sell both books and minis, cross-marketing their RPG products and their minis products and hopefully expanding the customer base for both products at the same time.
Also by focusing more on the tactical table-top wargame aspects of D&D, it allows WotC to appeal to the non-gamer. Let's face it, the image of a bunch of "geeks" sitting around, talking in funny voices, and playing "Dungeons and Dragons" is very negative image/stereotype that does not appeal to the mass market. But when you have something like minis and grid maps, suddenly things start to look much more like a fascinating and complex board game. And board games appeal much better to the mass market than the negative RPG stereotype does.
If WotC can sell minis to gamers, sell RPGs to minis players, and bring in new blood with either market or through the new D&D board game, they will be doing all of us a great service because they will be expanding the RPG market base. That means more customers for not only other d20 publishers, it also means more people getting into RPG's and higher sales for WW, Hero Games, etc.
Some things WotC should be doing right now: Get the D&D board game in major U.S. chain stores like Toys R Us and Wal-Mart, include ads and discount coupons for the D&D mini's game and for the core rulebooks within the box.
They should also go to Cartoon Network or use some of that Hasbro purchasing power to put out a FR cartoon show. Hasbro could even do action figures and stuff, in addition to the minis. Who wouldn't want to buy Battle Action Drizzt? Or Elminster with Kung-Fu grip? Other figures and accessories sold seperately!
Seriously, the amount of IP that WotC sits on and does nothing with just boggles my mind.