It happens this way everywhere in our capitalism-run-amok society. Take a look at checkout aisles in stores to see what appeals to everyone. Candy and gossip?
C&C RTS and oddball action games with proven-small audiences have no place in a billion dollar blockbuster business like EA. Wave goodbye.
Capitalism also allows a small group of guys to work hard and make a kick-ass game, release it on Steam or some similar place and make a boatload of money, opening them up to further and bigger development projects down the road and allowing them to make games for a living. Day of Defeat/Killing Floor/Ausiosurf/World of Goo/Braid/Zeno Clash/Etc. etc.
How horrid.
There will always be mainstream entertainment, and since it pleases the abundant majority of people, that is probably a good thing. More niche people get all kinds of indie options and smaller projects, and that is a good thing.
Capitalism is great. STFU.