The only reasonable explanation I can accept is that version 4.0 has very different algorithms to better render and extract details from the latest sensors. The upcoming updated 3.x will include the new controls, GUI etc and support the older models.
Otherwise, they are seriously SERIOUSLY on thin ice.
I find it helpful when thinking about these things to put myself into the shoes of other users as well as Canon's profit-making machine.
I think a reasonable explanation here is that changes in the file formats along with the move to 64-bit hardware are driving this. Future amateur cameras will likely support the new formats. That the 70D doesn't may be an artifact of corporate bureaucratic pathways, processor hardware selected, or perhaps the software was developed off of a previous camera to lower costs; I couldn't say, but there are many possibilities. A converter module to support some of the older CR2 formats may or may not be in the works, but is probably a low priority. From Canon's point of view, folks with older amateur cameras have a DPP version that works for them.
I currently have only minimal use for DPP. What I would like to see is the migration of EU into DPP, with advanced tethered control of the camera in DPP--something not likely to be available with Lightroom or Photoshop. If I can take a shot tethered, and process out aberrations while doing so, then catalog and post-process with Adobe tools, I'd be a fairly happy camper. This makes better sense to me as it gives desirable value added to the products
and does so within a common advanced amateur/professional workflow (and those are the people who care and also drive profits). If I were in Canon's shoes, now that the move to 64-bit hardware is complete I would be studying Phase One's Capture One software for popular features to swipe for version 4.1. I would also be adding further lens profiles.
I don't think Canon is on any "thin ice" here. As noted previously, there was a nice update to the older software released this month, and that version can be used alongside the 4.0.00 version. DPP is a poor cataloging/ image management tool compared to Lightroom, and totally inadequate for post-processing compared to Photoshop with its innumerable plugins. Most pros and advanced amateurs build a workflow around those or some less costly alternatives (eg: Bridge subbed for Lightroom for pure Photoshop 5-6 owners, or perhaps Google's storage and tools or ACDsee's Pro and Photo Editor for those unable to afford the Adobe Clod [sic]).
Add in that Canon is very good at profiling their customers and probably realizes that someone owning a $2000-4000 camera also probably has 64-bit computer hardware, and you can see where they're coming from. There might be a subset of Rebel users still eking life out on an older 32-bit machine, and those couldn't use version 4.0.00 anyway. My old XTi is 10Mp and uses an old file format--that hardware is only 7 years old, but I really don't expect Canon to write new-fangled software for it since I am an advanced amateur who can move on to a better camera. If I was a point-and-shooter using my Rebel just to shoot Christmas with the kids I might not care that I couldn't use the newest DPP. Throw those subsets together, and I don't believe that the vast majority of the user base will complain at all.