I think it's perfectly OK for a game to 2 or maybe 3 editions to refine the system and such. By releasing the game to hordes of avid gamers and reading your forums, you have the best playtest ever. After that, I would begin to wonder... Of course everyone wants something different, so... But at some point, it's just : "Let's make something else out of this game! Let's rebuild the system to see what happens!". To me, D&D goes like this :
OD&D : New rules and then, some refinements with different versions...
AD&D : Refine
AD&D 2nd : Refine and stabilize (AD&D is, to me, a very good system that expands and learns from its predecessors)
D&D 3rd : Rebuild and then refine with 3.5 (Easy to recognize, but too much changes)
D&D 4th : Rebuild
I'm aware that AD&D 2nd is probably not the most popular version of D&D, but I think of it as the peak of the "old" D&D. Same system but simplified and polished.
This is, of course, highly subjective, as someone could consider 3rd Ed. the peak of the D&D evolution, but I think the introduced to much changes. The play experience isn't just the same. Characters made from 3rd are not compatible with older editions, but 2nd is, to some extent, easy to mesh with older incarnations of D&D.
This rambling got me thinking : Does a new version of a system have to be compatible (to some extent) with its predecessor in order to be a "valid" new version and not a complete rebuild?
Also, do you prefer changes brought inside the same edition (like a sourcebook that would uptade some table and say : "this is the new official way to do things") or a new edition altogether?