I think it's just the market differences between North America and Asia..
Just look at the technological changes (non-RC) in Japan, and its demand for it.. 5MP camera phones, insane robotics, they just eat that stuff up, and will pay to get it. Anything they have is ahead of us by years.. so, when a new part/chassis/thingamajig comes out, even the stick-pack 415 chassis, they know the demand is there, leading to even crazier innovation 6 months down the road..
On the other hand, here, there's always griping about the new part/chassis/battery/thingamajig of the month we're having to open our wallets for..
Meanwhile, how old were the TC3, T3, B3, and even L3 before their successors, and how long before a RC10GT2 or NTC4? Tons of people still race the L3 and NTC3, and are competitive with the T4 and B4.
Sure, the touring car category they're falling behind in the rankings, but how many people who own a RC car actually competitively race, thus NEED a loaded machine used by Marc Reinhard or Paul Lemieux? Who would want to run their T2 or Cyclone down their local rock-filled parking lot in the hands of a 14-year old? Few regular people would know the difference between the performance of a TC3 and TC4, or a MSX and T2.. it's all down to money and enjoyment of the product, and if a RTR kit makes it all the easier to get into the hobby and have fun, then it's worth the sale. In the end, who pays its bills? 1,000 units of $500 kits, or 10,000 units of $250 kits? If that extra volume of kits means that many more people are getting into the hobby, competitively or not, then it's all the better for us as an industry. Heck, I'm proof.. I started off with a basic T3 back in my first year of University just for the fun of it, and it's since led me down the road to actual RC racing and a rather eclectic car collection!
Not to say, in the end, that Associated is selling out or doesn't want to be competitive, I'm very sure it does, and keeps a very talented factory race team for the purpose of knowledge, testing and competition, leading to a better machine. It's just a matter of time before they're back on top, and I'm sure they'll still be in the US, with Mr. Baker at the wheel when it happens.
However, it's also a matter of where we all started in this addiction, and many of us can say it was with an Associated RC