I think Blizzard is still top-quality in the industry. For one, virtually no other video game producer has the design transparency that Blizzard has. Who else has open Betas and regularly converses with their fans about future changes to their games? They understand that they have a passionate fanbase and embrace it.
When people complain about Blizzard games, I honestly sometimes wonder if we're the ones who are the problem. If we're the ones who are changing while Blizzard is just staying true to the games they've made. Diablo III is, in its essence, Diablo II. There are changes, sure, and you might not like every tiny change Blizzard made to the formula, but for the most part those changes are tiny ones. Now I can't speak for everyone, but I was about 13 when Diablo III came out. What was entertaining to me when I was 13 is not entertaining to me as an adult. Genres evolve, interests change, and the overall expectations that gamers have changes too. I read an awesome article about how Super Mario Bros. wouldn't have been the commercial success it was if it was released today with the appropriate graphics and hardware capabilities.
We, the audience, are changing.
The problem is, we're not all changing at the same pace, and catering to one group is going to ostracize other groups. At this point, Blizzard's best bet is to stick to their guns, work towards their vision, and let the people who aren't down with Warcraft's slowly evolving formula float away. All 3.3 million of them. Blizzard talks about how its business model can't leave the subscribe to play method. Well, it also wasn't designed around 10 million players at the get-go either. I don't think WoW's population going down is going to kill WoW, not until we're looking at the >1 millions anyway.