A subscription service needs a LOT of content to keep people subbed. It's almost a necessity for MS to have a consistent supply-chain. And, given the cost of AAA games and time, it's only logical they pad it out with indies, and AA.
For me, the issue is not Gamepass. It's the mis-management, their games are not lacking in funding/or time but that a lot of projects are in disarray due to poor management. Also, MS need to treat their flagship titles better and hold them to a higher standard. I don't need to write anything about Halo's reveal back in 2020, Sony would've never given the greenlight to showcase the game in that state. I was also under-whelmed by many aspects on their biggest game in showcase today i.e. Starfield. I expect a certain Bethseda jank given their engine, but it's kinda shocking how little of a leap they have made when it comes character models/animations. I was listening to XCast and they were positive on the show but also mentioned how the showcase lacked a "wow" factor when showing off a game. Starfield was perfect candidate for it and it fell short.
This is a random NPC in Horizon which gives you a certain side-quest. Like, how can this be a cross-gen game and be of this quality while main characters in MS flagship title which is next-gen only look like how we saw today? I feel that's a bigger problem, despite throwing ludicrous amounts of money, MS aren't seeing the same return on their investment as Sony is.