Ignoring, for the moment, just how much money it'll make for everyone involved, it'll still dilute/weaken the Blizzard brand.
Mike Morhaime says that both Blizzard and Activision are committed to quality. The thing is, Activision's idea of "Quality" is different than Blizzard's - Activision has a lower bar.
For one thing, if Activision was truly committed to quality they wouldn't do movie-license games - movie-license games, with their ironclad ship-dates, are the antithesis of quality. When I was there, we did manage to make one good - but not great - one, and that was despite the terrain.
So now the Blizzard name is going to appear on Shrek 4?