I don't think every game NEEDS a 7-10 year dev cycle to be good. But I do think most games are probably up to 4 years already from inception to completion (aside from obviously the yearly sports game updates and the expanded sequels - Batman, Ass Creed, every FPS etc, etc).
I do still stand by the fact that if MMO income can provide the developers the freedom to use 7-10 years to make a deep game that's shipped in a good condition then they aren't that bad for gaming overall. In fact if I did work for a game company I'd much rather work for one who had a nice healthy bank balance so they could afford a "when it's done" mentality instead of the constant pressure of deadlines.
Then again it doesn't have to be MMOs - Steam allows Valve have long dev cycles after all. But any method the core PC developers use to mean they are not reliant on back catalogue sales is fine by me.
I also do hope Bethesda manage to get some kind of easy income flowing too - they can produce some really nice stuff but it's rushed out of the door. If that means a Fallout MMO then I'll be happy but not surprised - I'm guessing they've been working on it for years, I'd expect an announcement very soon and a launch window to come just before the launch of the WOW Kung Fu panda expansion (when subscribers are at their most bored and worried about the upcoming changes). And yes the exact timing of the settlement does make me wonder if they had planned to slap the Rage name on it rather then pay Interplay a penny until Rage failed to set the world alight.