DLC is more profitable. And they are just a developer while Bethesda is the publisher. Publishers usually call the shots.
The DLC
might be more profitable.
But I dunno how many people will still be interested in NV by the 4th DLC let alone the 7th.
And whether their time and money put into those DLC's and the amount of consumers buying them is a good ratio or not.
So an expansion would cost as much as 3 DLC's would cost, instead of spending time and money on some small 7 hour arcade games (Which would likely take them a half year to develop if not more.) they could instead spend their time on one large expansion instead and it'd be just as profitable if not more and it'd give us consumers a lot more content.
Just saying.
Point of profit with smaller DLC's is to release a lot of them under a short time.
Considering we haven't even heard anything about Honest Hearts of if it even is the next DLC I'd say that the development time between the DLC's is going to be longer than FO3's.
If it's longer that means that more time is put on it which could be put elsewhere.
I don't see it as being as profitable.
So instead of taking a long ass time to deliver a couple of small DLC's which hardly "adds" content to the game it'd be better to spend that time on a new game or an expansion.
Both for them and for us.
But I don't know a lot about the gaming industries economy so I'm just speculating here.