Everything you have described there is not a justification for the release schedule we have now.
There is no evidence what so ever that Wizards lost money during 3rd and 4th edition because of the books and yet I see this argument pop up. I also keep hearing this argument about creating books that people won't buy. I think this statement is a bit vague and I think it's being taken that way. I bet you Complete Mage and Complete Arcane sold well during the 3rd edition era, as did the Forgotten Realms books, and many others. Sure you would have that odd book that didn't sell but if you want to use that argument then you need to provide figures for each and every book that was created and go from there.
I also never heard that 4th edition did badly because of the amount of books that were available. A lot of what I heard was the amount of errata that came out and made a lot of the books seem a bit obsolete.
It really has nothing to do with how well the books for 3E and 4E sold... it's all about how fast the books get released. And because 3E and 4E were released one way... it's why 5E is taking a different track.
If we just say for the sake of argument that all three of these editions will end up selling about the same amount of books overall (when you include the core books, splat books, adventure books, and setting books)... 3E and 4E had very aggressive schedules. Most of the books they sold occurred in Years 1, 2 & 3. Thus, when you got to Years 4, 5, & 6 of the respective lines... a lot less money was coming in because the edition was front-loaded, and thus the feeling became that beginning work on a NEW edition was a good idea (as they could see that a new core book influx of cash would be probably two to three years down the line with the new edition's release.)
But what has been one of the big complaints in recent years? People feeling that new editions are being released too quickly and thus they are being forced to "buy all their books over again". So how does WotC assist those people? By expanding the lifespan of the edition. How do they do that? By not making Years 4, 5 & 6 so barren of sales that they panic and feel like they need to start working on 6E. And how do you not make Years 4, 5, & 6 so barren of sales? By releasing good-selling product in those years that in years past would have been released in Years 1, 2, & 3.
Can you imagine the influx of cash WotC would get in Year 4 of 5E's lifespan if that was the year the Forgotten Realms Campaign Setting finally was released? It'd be a huge Year 4 for them. Now granted, yes... by that point there would be a contingent of players that might have "left" 5E because they didn't get that setting book immediately and they felt like if their needs weren't being served that they would go somewhere else where they were "wanted"... but a larger number of players would just keep playing 5E as they always had (because a lot of the players don't NEED a "campaign setting guide" to play the game, and another large group don't even use established campaign settings in the first place). Then these folks would then buy the Campaign Setting in Year 4 because it looked to be an awesome new book (detailing a lot of the history that occurred in the five or six FR adventure path books up until then, much of which were directly a result of player action from all the Adventurer's League material.)
Here's the issue for a lot of people right now: There is MORE than enough material in the Player's Handbook (and the subsequent Elemental Evil and Unearthed Arcana documents) to play in 5E games for
years. But if players are upset that there isn't enough material to BUY right now... it's pretty obvious you aren't getting this material to actually *play* with, you're getting it because you just want to buy it. But if that's the case... you aren't the person WotC is interested in serving, because you have no stake in the
long-term viability of the game. You're not in it for the long haul because you aren't even concerned about playing the game
right now. Your focus is all about just buying stuff, not actually using the stuff you already have. And thus you are a great person for a company that just wants to pump out a crapton of material right away in order to squeeze the stone dry immediately... but for a company looking at the sales in the latter half of this decade... they need to hold *some* product back so there's something worth releasing down the line.