SWG can't be considered that big of a faliure when it lasted as long as it did. DDO was meh when it came out (not a critical faliure but not particularly good either). and DDO Unlimited was a significant success and step up.

It was a better idea to rework 11 than do 14.
No, reworking an 8 year old game would not have gained them lots of new players. Spending a lot of time and money to update a really old product with no likelyhood of return on the investment is not a good idea.