Living Story was popular for two reasons – rewards and there was nothing else to do. The longer this goes on, the more true it is. Truly interesting rewards are pretty well only found in LS or behind hard RNG (fractal skins, Teq box, Toilet, etc), and even then, you have to sort through piles of useless crap to find the interesting bits.
Similarly, I’m sure someone at Anet holds up their tablet with all the fancy piecharts that shows how well LS has done with players. The fallacy is that first, the content is completed in a couple of hours, and is easy for any semi-dedicated player to do, and second, it’s the only kittening new thing in the game. They’ve left us with the same zones, dungeons, fractals, wvw maps and pvp maps for two years, so yeah…we’ll go check out your little melodrama for two hours a week and then go back to whatever we can do to entertain ourselves.
To the OP – it’s definitely the game the Devs want. They’ve shown us again and again that this is what we’re getting, and if we don’t like it, tough luck. Now, that’s probably a mandate from management and driven by money issues. They hung their hat on LS early on, so all their development is arranged around it. Their earnings projections are built on it. Their press is created to support it. It’s not going to change, regardless of how much we’d like it to. The best we can hope for is some tweaks here and there, and maybe them throwing us a bone every now and again.