In the short term, the OGL was a great idea. However, the execution was flawed on several levels, and ultimately came back to haunt them.
The original idea behind the OGL (as it was described to the company I was working for at the time) was the "evergreen model." WotC intended to farm out the production of supplements and modules to third parties, and make their money on the "evergreen books"--the PHB, MM, and DMG.
Unfortunately, that model had one small flaw: there's no such thing as an evergreen book. Once the majority of players have the core rulebooks, sales are going to stagnate; that's just the nature of the beast. The books don't wear out fast, and there just aren't that many new players coming into the hobby.
Consequently, WotC then had to jump in and compete in the supplement market. I firmly believe that 3.5 was a way to ensure that they didn't HAVE all that much competition; by tweaking the rules, they not only revitalized sales on the "evergreen" books, they largely killed interest in all of the 3.0 OGL material already on the market. (Heck, I don't know about you, but my FLGS still has a lot of that stuff gathering dust on the back shelves.)
Thus, any company that wanted to really be competitive had to start over with 3.5 material, ensuring that they didn't have a headstart on WotC.
In the long run, I think the OGL was one of the major reasons 4.0 never really took off. WotC gambled on "Play the new edition or get left behind, because nobody will be supporting the old edition"--and, in this case, it wasn't true. Hence Paizo's ascendancy and the substantial chunk of their playerbase that simply stayed with 3.5 and Pathfinder.