Well, I had hoped Horse Armor would backfire, but the consumer base lapped it up and said "Thank you sir, may I have another."
I don't mind DLC as a concept. Fallout 3 did it very well, even if the more combat focused ones were lame the general idea of 5 mini-expansions with different themes and locations instead of 1 full expansion worked out well I thought. Other games like Red Alert 3, Red Faction Guerrilla and Grand Theft Auto 4 have done similar things that also worked out well.
As a replacement for expansion packs it has its advantages and disadvantages, but it all kind of evens out in my opinion.
The real problem with DLC is that it is easily abused and the random consumer can't tell the difference between quality expansion conent and being fleeced. The idea that Call of Duty can sell 2-3 million people a map pack of 4 multiplayer maps for $10 is just depressing. The fact EA can sell cheat codes for $5 is depressing.
My problem with DLC has a lot less to do with the concept itself than it does ignorant consumers supporting poor value products, basically. That can be said for almost all aspects of gaming right now though, really.