In terms of business alone, I think it makes perfect sense. It is also what players have been asking for years. People complained they wanted model releases more often. They complained that they wanted more in-game balance. Be careful what you wish for. This will help fix both those issues.

There are 15 armies (16 if you count Chaos Dwarves) in fantasy. You can't release one kit a year with that many armies; at least not unless you are a growing business. Fantasy is not. The molds are expensive to maintain and often don't sell enough. Reducing armies and eliminating old molds will reduce those costs and allow GW to focus on new models. That is what people wanted, right? They want new, awesome models to replace this old crap. They'll be limited releases; not necessarily a one-time unit, but a one-time sculpt. If you want this elf wizard sculpt, you better get it now, otherwise you can get a different one in two years when they do it again. That is cool to me. My army will be unique, unlike any other.

There are 15 (16 if you count Chaos Dwarves) in fantasy. It is nearly impossible to have game balance with that many. Each army has to have something they are uniquely good at, or else what is the point. That means armies will inherently have imbalance in strength. There is too much to balance currently, because they are forced to release things one at a time, instead of all at once. With a handful of armies, they can release rules simultaneously. It will be easier to play test and control the meta with the yearly releases just in case.

One final note to a very small group of people. If you haven't bought a Games Workshop product from a Friendly Local Game Store, GW's website, or from an Online Reseller, why should Games Workshop keep doing what they were doing? You weren't buying anyway. This way, at least some of you will buy some more models. You just might have more fun with better, more-balanced rules.