I see the WWE's problem as follows:
The WWE roster and the strength of its storylines was greatest when WCW was a serious threat: they really built up their rivalries and did innovative, impressive stunts and had superb stables (DX, nation of domination, the ministry of darkness, the corporation).
We're now in a situation where the WWE doesn't HAVE TO do all this, although TNA is a major wrestling promotion and its nearest rival, it has nowhere near the international support or money that WWE has. TNA tries really innovative things, like having PROPER hardcore matches (which the "new breed" of ECW isn't doing) and quality competitive matches and rivalries, but until it is big enough to do weekly shows in major stadia across the US, its not going to compete properly. I really hope TNA keeps growing because then WWE bookers and storyline writers might start to do interesting things for once in the past 5 years!