Maybe they just lost the mentality of "there comes a time to shoot the engineers, and move the product out the door"?
I had the loan of an M3 once, and it was probably the second-nicest camera I've ever handled. Certainly the quietest, and easy to carry and focus, as long as it wasn't too bright. But, it was made in an era when it was meant to be high-quality, working, equipment. Now they're overengineered to impress dentists/lawyers, and no longer sold as 'work equipment'. (though they'll certainly trade on that reputation)
Personally, I'd like to see something like the CV R2/R3 from Leica, where they give in to the polycarbonate body, but keep the Leica shutter, size, and fast-handling. If it sold for even twice a CV, that would put it into the price range of the Nikon F100s, where it would probably find a market. Making it with a factory-interchangeable back so that it could be a d*l (sorry) as well, using the same lenses at a similar price would make it more desirable. One body for work and fast output, and one for film, more personal work, and that which requires film resolution/permanence/look.
As for what's wrong with Mercedes, maybe they're channeling the spirit of Chrysler's K-Car?