LEGO retiring old sets?
In order to sell older sets, TLG would have to either:

(1) continue a production run even when the demand for a set has dropped off

Production capacity is limited to a set number of components / sets at a time, and it makes sense to focus on newer, more profitable lines. For example, the moulds which produce LEGO parts are unbelievably expensive, but each mould can only produce a certain number of parts before it needs to be replaced.

or

(2) reproduce older sets

TLG has tried that in the past, and it hasn't proven particularly profitable for them. The problems are similar to (1).

or

(3) store sets longer in the hope that demand will pick up again

Which is risky, and typically less profitable than focusing resources on making new sets.



You can bet that TLG spend a lot of effort figuring out how to maximise the profitability of the company. Of course, it is possible that TLG has occasionally made the wrong decision and retired a set too early. I imagine, however, that these occasions are relatively rare (and even if they aren't, I don't suppose they'd tell us anyway).