Shamus, I'm totally pleased to have you writing regularly for the Escapist again, as your articles always manage to succinctly bring up all the problems I have with the industry.
The ultimate problem is one of priorities. I believe the above-linked video explains it quite succinctly. A smaller studio makes money in order to make games. As long as they turn a profit, things are golden, because that means another game can be made. EA, however, makes games in order to make money, which as an approach in this industry has a whole host of problems. If your priority isn't on the game itself, but on the money it generates for you, then things like quality, craftmanship and re playability go straight out the window. If your game is complete crap, yet still somehow manages to turn a profit, then what incentive have you got to fix all the things that were wrong with it next time round? *Glares at SimCity*
If you look at any company that's still doing well after decades in the industry (Valve, Nintendo, etc), it's because as a general rule, they don't sacrifice the need for quality games at the altar of greater profit share. Valve still takes as long as it feels it needs to work on whatever games it wants to, and releases them when they're ready. Nintendo are quite happy to give a three year development schedule to a handheld title (Luigi's Mansion: Dark Moon), and fit as much gameplay in as possible.
The reason those companies are still around and still doing well is because they know how to play the long game. Suckering in your consumers with micro-transactions, DRM and day 1 DLC across all your games might net you money in the short term, but it simply isn't conducive to building a healthy long term relationship with your consumers. The reason people stick with Valve is because experience has taught them that a new Valve game is always worth playing. Same with Nintendo. For all their flaws, the same could also be said of Blizzard (depending on how you feel about Diablo 3). EA has fallen into the trap of trying to net as much short-term profit as possible, and allowing the quality of their games to suffer as a result, yet they can't see how many bridges they're burning in doing so.
I'm of the opinion that if you want to make multi-billion dollar profits, the gaming industry is not the place to go. Yes, profits can be large, but costs are currently so exorbitant that you're much more likely to crash and burn than you are ever likely to make that multi-billion pay cheque.