Because sometimes its more costly to drop a project then follow through with the investment.

What games in particular are we talking about here anyway?

Blizzard is awesome because they haven't released a bad game in over 15 years. As others have pointed out, they scrap the bad ones.

They also release barely any games.

Because they only release good ones, and those take time. Including expansions, which are also always good, they will have had 6 releases this decade. Starcraft 2 will be 7. Diablo 2 was 2000, too.

Because logically it doesn't make sense. Making games is usually a million dollar commitment. Think about it, you just put in over a million dollars and like a year into a game. Somewhere at the end of development everyone realizes it sucks. Do you drop it and get 0 dollars back? or put it out and at least generate some revenue from it.

That is the traditional business model. It should be interesting to note, that many companies do not drop games but delay them until they become good. Blizzard and Valve are both notorious for delaying games. Blizzard has has one very publicized case with Starcraft: Ghost where they outright canceled it.. Its interesting that the companies that seem to do this are the ones that are revered by gamers everywhere tho. Of course they're big companies, not everyone has the balls to hold onto a game while shelling out another million or another year.

I'd rather see them realize it's crap and fix it before it goes out the door.  Both cost money though.

Actually, looking at Wikipedia, Blizzard was releasing a full game every 2 years or so with an expansion inbetween every time until WoW came out. Took them a few years for the WoW expansion rather than just 1. Another expansion is coming (their first official 2nd expansion) and SC2, so it wasn't as little as I thought. The only large gap was after WoW, and that was pretty much only 2005 and 2006 without a release. The 2nd WoW expansion comes out this year and most likely SC2 next year. Diablo 3 is rumored to be in development as well.

That's not really true.  The DK game that the SMG team had produced was Jungle Beat, which is a pretty amazing game considering the fact that it was designed as a vehicle for the bongo controller.

If you've spent million on a project you'll want that investment back, gaming is a business afterall.

A couple reason really:

1. They want to get some money back and don't care that it is bad (like EA is accused of doing)

2. They are to small to take the loss and are forced to release every game even if they know it will not make th money back

3. This goes along the lines of the saying, "to far into the forest to see the trees." they just don't realize it is a bad game until it starts to hit reviewers and gamers and it doesn't sell, then they blame piracy.

and just so you guys know, Starcraft: Ghost didn't get canceled, it just got put aside since they had so much trouble with it. there are rumors that once Blizzard merges with Activision that Infinity Ward will pick the game up and finish it.