Ballmer has ceded control over the direction of the company to Sinofsky. WinDiv is the tail that wags the dog, and XNA wasn't a creation of WinDiv.
I'm not sure that's why XNA didn't work out. Without a doubt, WinRT's ability to have C++ apps & DirectX exposure is the way to go for games. There are just too many very good existing game engines out there that can be ported to WinRT with minimal effort.
I've always suspect that XNA was a stop-gap, because it hid only a little bit of DirectX from the hobby programmer, but does impose a huge run-time of .Net for that abstraction.