I think the market forced them to rethink their own marketing scheme. I can vividly remember the "5 brick" LEGO sets they were selling from 1999-2003, they were awful, they conserved using more bricks by condensing them into bulky shapes (The chasis for the common car was replaced by one such brick). Their color choices also were very not well thought out (Rock Raiders, Antarctic Explorers, LEGO City sets). They replaced a lot of old concepts with decals and stickers, which in my opinion was a bad decision. This was when they started loosing money to competition. Their offices and factory in CT was then moved to Denmark. Then things started to move back on track.
LEGO sets now are a step in the right direction, but I still loved the sets from the 80s-mid 90s.