The biggest single mistake WOTC made with 4e was the elimination of a true commitment to the OGL.
See, as much as certain people would like it to be, tabletop RPGs are not passive forms of entertainment. That requires engagement.
And of course, we had been through all this before. One of the great myths I encounter regularly in RPGs is that 3e was the first open edition of D&D.
It was most definitely not. I remember when I started gaming, in 78, I could get books like The Complete Alchemist, offering a strange and wild new character class, modules like Evil Ruins or Lich Lords from Role Aids, alternative gaming magazines with classes and adventures like White Dwarf, and the city of Sanctuary, in all its gritty glory produced by Chaosium.
Not all of it was to my taste certainly, but its mere existence spurred my creativity and kept me engaged in the hobby on a far stronger level. Then, toward the end of 1e and in force in 2e, these products started dwindling away.
And not because of some mythical bubble- no, the tide was stemmed by the very company that had poked the hole in the dam to begin with.
And then with 3e, those floodgates were opened even wider, releasing a tide that raised all boats, including WOTC.
And again, because it was a force that couldn't be controlled, its benefits were forsaken.
Is this the reason 4e failed? Not entirely for sure.
However, it was an advantage of 3e and it still is- Pathfinder, OSRIC, Labyrinth Lord, Mutant Future, d20 Modern, Modern20 all continue to benefit.