I was surprised by the release of 3.5 so maybe I'm not the most qualified person to answer, but I do not think a 4.0 edition is in the works for a release within the next 24 months either. Perhaps it was merely convenient to update the books at that time. To answer the original questions though...
DSC and Dragon Scale Counters would continue to make material under the OGL for the newest version. Where possible, we'd continue to support older versions as long as it was profitable to do so. The 3.5 SRD, like the 3.0 SRD will always be available, and if there was demand we would be interested in supporting it. It is hard though to support game systems if you don't play them.
Based on the speed with which people came to ask for 3.5 edition counters over 3.0 counters, I would say though that support for old editions would dwindle very quickly. It would depend on how different the rules sets were I suppose.
What should be revised? Here are three things.
What happens when you evade an area effect (how come you dont move? (BTW, I have an answer for that)
How do swarms work? Theyre a great idea, but I hate some of the aspects of the way they were implemented. The way that massive damage and swarm hit points work should be revised, along with rules for when a swarm is no longer a swarm.
Spot penalties for Long creatures, and non-square face/reach rules. I appreciate what WotC was doing in changing the face/reach rules, but my horses arent square, and neither are my dragons. Some creatures NEED a face, and I've been hashing some rules around for that too.
I'd hate to see 4.0 come out too soon. It splits the gamers apart and tears down a lot of what WotC accomplished in moving people toward one game system. Its confusing and chaotic, and perhaps made worse because the changes are more subtle than say, the changes between 2E and 3E.