I understand that aspect of it; although you mentioned facts I didn't know. BUT, if you read the article I linked, you find out that KEN ordered the cessation of all current Sierra adventure games in order to change the way Sierra games were going. Next time you wish Space Quest, Torin's Passage, etc. had more sequels, think about MoE - that's where everyone was redirected. Therefore stopping their Good projects to focus on 'King's Quest Meets Diablo.'
Ken had a knack for seeing the "writing on the wall" in terms of the PC game industry, and I think he saw which way the wind was blowing with regard to adventure games as early as the mid 90s, before they had officially "died." He probably loved all those series and wanted to keep them going but in a profitable form. As the '90s ended it was obvious that the traditional, 2D, non-violent adventure game wasn't what most gamers wanted. I think he was hoping these great series could be brought into a new age, in new mediums, and was counting on fans being more open minded. I personally love the "KQ Meets Diablo" approach of KQ8 and wish the series had continued on in that direction....
I don't think it was really greed or malice on his part, simply wanting to keep those games alive. A public company with the demands of the truly greedy--the investors and shareholders--- isn't going to invest in 2D adventure games ala KQ6 if that's only going to cost them money without getting a good return.
Ken was a guy who foresaw massive multiplayer online gaming as early as 1990; He foresaw the "death" of adventure games as early as 1990 and had retooled Sierra's business model to slowly move away from adventure games altogether sometime in 1990. Sierra's focus in the mid 90s was to be on productivity software, and on games which could be revamped every year--Think Madden sort of games. That's why he and Sierra bought up a bunch of companies in the early-mid 90s.
He was openly declaring the adventure genre dead in 1996, even though Phantasmagoria had been Sierra's biggest hit ever just a year before. He saw where the wind was blowing. He wanted to focus on online gaming, massive multiplayer stuff; His biggest regret was selling The Sierra Network.
This is a guy who wanted to merge with Broderbund in 1991. Had the merger gone through successfully, Sierra would've been a co-publisher of the mega hit Myst (Broderbund was the publisher of Myst for Cyan). He also wanted to buy id Software after the heads of id sent Sierra a demo version of Wolfenstein 3D. The only reason that fell through was the guys at id got greedy and decided to ask for more than Sierra was willing to give, after Sierra had already given them a 2 million dollar offer to buy their company. Had Sierra succeeded in both of these initiatives, Sierra would still be alive and would likely be one of the biggest, if not the biggest, game company on the planet.
Consider that his last major decision as CEO of Sierra was to sign on Half-Life in late 1996 or early 1997 as a Sierra published title. He also secured exclusive rights to the Half-Life franchise (but a later Sierra CEO gave that right back to the creators of Half Life). Half-Life went on to be a huge hit, one of Sierra's last. Had Sierra retained the exclusive copyright to Half Life that Ken had secured, Sierra could've "been in the money" with Half Life and still been in business today.