With option 2, they diversified their basket and no matter how hard the game fails, they have ensured at least a certain amount of customers from the Hype alone (that's how Early Access games function by the way), while going with Option 1 can end up with a quality game that is unheard of.
Now, Blizzard has a very powerful brand because of their past success. A lot of people (used to) think that every single game released by them is a guaranteed massive success. They realize that, therefore, they exploit it fully to their advantage. It's basically like PR for which they don't have to pay a single dollar.
Now, after they are aware that they don't have the original dev team, that their brand is powerful, and that they have enough proof that focusing on advertising in the current state of this industry is the logical thing to do, do you think that they would EVER switch back to their old model of dumping it all on quality of the game?
Alright, two long posts, I'll calm down and finally get to my point. What I want to basically say is that they're following a model that is incredibly profitable short-term, but damaging long-term, as they will continue to invest in brand exploitation, rather than living up to the expectations of their current customers.
Cata was one example, MoP second, WoD third, and I think that Legion will be the final nail where their core fanbase has had it with their disregard of game quality over advertisement. HS 2 will be another, OW's expansions will be yet another.
And in the end, what basically happens is that they managed to attract some customers doing that, but they shat on the expectations of basically everyone else, and they are no longer capable of exploiting their brand (upon which they're now so dependent on).
It's basically what EA and Ubisoft went through, and pretty much what every large publisher in the industry goes through.