Most certainly they do, and it pays for them to utterly revamp the system.
I suspect they are victims of their own success, the 3.x launch was a Big Dealtm, re-invigorating a sector of WotC that had been more or less dead after the acquisition of TSR (they were still publishing modules and books for 2nd edition in the late 90s but they were still fairly low profile, I'd say). Now Wizards was still enjoying the dizzying success of CCGs but that was petering out big time right when 3.x launched and it turned into a big hit for them.
I think when 3.5 launched it was more or less trying to follow the traditional paths set by TSR many moons ago keeping the system evolving in the hopes that new mechanics / modules would keep players going but *I* think that with the open-ended d20 system they ended up having to compete with the gamers themselves who were publishing custom rules and modules online.
4.0 came along promising to clean up a lot of the mess in 3.5 (and also change the licensing to cut people out of legit mods/tools). 4.0 brought a lot of changes that made the game fun for an even wider slice of humanity and it flew off the shelves (again big success).
Now it's been a few years and 4.0 hasn't really moved all that much (it "just works" for most people), so on one hand you might say that WotC has decided to side-step the whole rule-bloat issue by deciding to run with a whole new version AND/OR realized that if you force an upgrade that will likely sell 15 books per standard party size... well it's hard to not want to rake in a profit like that.
Again this is all my conjecture/demented thoughts, but WotC really has to be careful about the pace they set, they should neither want to burn out nor fade away...
