The economics of the games industry mean that you can't turn a profit on AAA games without sequels. The new IP push was about reducing EA's dependence on sports titles and externally-licensed IP. (Also, to a degree, an attempt to reinvigorate EA's corporate culture) It was always in the game plan that the successful new IP games would receive plenty of sequels.
I wouldn't say it was a total failure. Mass Effect and Dragon Age are pretty good. =)
This is very true. The first title establishes a buzz about the game, the second (and third, etc.) game often make more money because the brand has been established and demand created. There are a large number of people who don't want to spend the whole $60 when a new IP is released and will instead wait for it to be discounted, or buy it used.
EA circa 2003/2004 was pumping out sequels yearly for titles that should have long been put to pasture. This has changed quite a bit in the last 5 or 6 years with IP's like Skate, Mass Effect, Dragon Age, Battlefield (and Bad Company), Dead Space, where the sequels aren't rushed out the door without much thought, not to mention other new projects like Dante's Inferno and Mirror's Edge.
I wouldn't say it was a total failure. Mass Effect and Dragon Age are pretty good. =)