The recent shift with the Project Titan is just the latest indication that something is severely wrong with the way Blizzard works.
To emphasize what I mean here are some numbers from the wikipedia.
Employees: 4700 (as of 2012)
Games released since 2005.
-The Burning Crusade (XP 2007)
-Wrath of the Lich King (XP 2008)
-Starcraft 2: WoL (2010)
-Cataclysm (XP 2010)
-Diablo III (2012)
-Mists of Pandaria (XP 2012)
-Starcraft II: HotS (XP 2013)
Now taking a look at these releases it's obvious that most of them are expansion packs. That means they are built on a existing engine and an experienced team. Churning out regular expansion-packs should be a pretty seamless and routine process and fairly efficient after doing it for several years.
That leaves Starcraft 2: WoL, Diablo III and arguably Hearthstone...which is quite a "simple" game as completely new developments in the past 8 years.
Now even if the majority of those 4700 employees work in Customer Support and non-development processes there must still be a large number of essential development staff that seems to be wasting resources left and right.
For a little perspective, here are the stats of Bioware, another big game-development studio that operates an MMO and was purchased by a publisher not too long ago (EA).
Employees: 800 (in 2010)
Games released since 2005
Jade Empire (2005)
Mass Effect (2007)
Sonic Chronicles: The Dark Brotherhood (2008)
Mass Effect Galaxy (2008)
Dragon Age: Origins (2009)
Mass Effect 2 (2010)
Dragon Age: Origins – Awakening (XP 2010)
Dragon Age II (2011)
Star Wars: The Old Republic (2011)
Mass Effect 3 (2012)
Star Wars: The Old Republic - Rise of the Hutt Cartel (2013)
Now I picked Bioware not only because it was another large development studio, but also because it had a similar reputation for making quality games. And yet despite having less than 20% of the staff of Blizzard, they have managed to produce many more games than Blizzard.
To drive this point home, development of Diablo III started in 2001 and wasn't released until 11 years later. Your typical AAA studio will churn out three quality titles in that time with a staff of 50-80 developers.
My point being that the outstanding success of World of Warcraft has allowed Blizzard to grow into and unmanageable behemoth that is cringing under its own weight and size. They have become so inefficient as a company that they are unable to release games in a timely fashion.
Their success as a company currently resides mostly in the impeccable reputation they established with their previous games. And even if the financial success of Diablo III is unquestionable, the damage it did to Blizzard's reputation is not.
If Blizzard did not have WoW to pay all of its bills it would be a much leaner and much more productive company.
PS: Another company that seems to suffer from the same luxury problem is Valve, although they are only a fraction the size of Blizzard.