Honestly I don't understand what the big deal about any of this is.
Blizzard North building was shut down. The employees there were given the option to move down to Blizzard South.
As far as Diablo 3 being crap cause a building shut down. The team that worked on Diablo has left for Flagship. People from Diablo 2 left for Areanet.
Seriously no one from the original teams were even left 2 years ago. If Diablo 3 sucks it would've done so being done at North or South.
This said if it ever gets released is another thing. I know it was in development since atleast 2001, and it was still in development when things were shut down.
I also know that Starcraft 2 is very likely to be developed pretty soon as a follow up to Ghost.
Both games are definately planned, if not both already in a relaxed development. How long they take to be developed is completely different question though.
Given Ghost is the only official game they have in Dev still, I'd bet money that this recent consolidation was to make sure both teams could work under the same roof using the same engine to develop both games at the same time.
Atleast that makes more sense to me than people claiming it was too expensive in San Fransico to keep the company open there. Especially given WoW is by far one of the most popular MMORPG games ever.