Here's an interview translated by Shmuplations about the process of creating the Street Fighter III series. They are politely open about having an aimless, meandering development process and a disappointed reception from players, particularly upon the release of the first version of SFIII.
I think that the "upgrades" of fighting game past-- in this case Second Impact and Third Strike-- need to be considered not as cash-ins or re-releases, but as the process of creation itself.
(Of course the old model of making console players pay full price for each revision was not good either, and there's a reason that's gone.)
As described in this interview, the designers don't find their vision for how this game "should" feel until the tail end of development of the second version. That's a really long time!
The devs couldn't have solidified that vision for the game without putting something to market-- or in SF3's case, the bosses drawing a line in the sand and forcing something out-- and getting input from players. And the process doesn't end; in this video the devs even talk about how System Direction in the Dreamcast version of Third Strike is specifically to let players mess around with the same stuff that they were in development.
Today the patch/DLC cycle takes care of all of this. You could probably think of every yearly Guilty Gear ST balance patch as a "#reload" or a "Slash" or whatever.
