Even though I don't watch WWE anymore (now that there's The Bachelorette, Fear Factor, High School Reunion and all that reality garbage taking up my precious free time), I'd agree that they've blown it since acquiring WCW. McMahon has made it clear in the past that his company is about "sports entertainment" and not "wrasslin". Well, since getting the WCW roster on board he's had to focus on the latter more than before, which is actually a good thing. A better wrestling product, but lousy for following storylines (some of which have been pretty inane/stupid and lacking the comedy and humor of the past, btw).
So what does Vince do? Split the roster into two brands. A seemingly good move which has yet to yield the desired results. There has to be a dominating storyline, front and center, that will grab the viewer's attention. Maybe with the return of Austin and the Rock, and Goldberg(?), it can take off.
IMO the fans revolted when the then-WWF tried to insert WCW into the mix as a part of RAW. They should've played out the Vince vs. Shane angle instead, with the top WWF vs. WCW stars getting it on. Instead we got mid-carders going against each other. Then when Hogan met the Rock on free TV--while it provided some markout moments for sure--it happened so quickly that it effectively killed any momentum that the WWF had. Hadn't they learned that hotshotting is not the way to go? Maybe it worked in Memphis or ECW, but not for a huge promotion like the WWE.