Then you are ignoring their handheld output, which they have been completely & utterly rocking in since the early days of DS & PSP (apart from some tuds like DS's Mana games). Type-0, TWEWY, KHBBS, Crisis Core, Theatrhythm, Dragon Quest IX, 3rd Birthday, Dissidias, Bravely Default, KHDDD, Tactics Ogre and a plethora of smaller titles have been more or less good/great. Sure, some of these games have some shortcomings (i.e. the story of 3rd Birthday is ass), but they still show they have directors, game designers & coders who can design & execute games that are fun to play. You're really exaggerating how much Toriyama has affected the company. He mostly contained his suckage in the XIII saga + ruined the stories of Front Mission Evolved (though, Double Helix is mostly to blame for that games shittiness) and 3rd Birthday (this was partly developed by Tabata & his team and apart from the story, it's actually a fun shooter RPG-lite to play).
In addition to Ito, people like Nomura, Tabata, Naoki Yoshida, Horii and Tai Yasue are only a few who've proven to be able to helm the development of great games (and not the only ones, I just don't remember the names of some like the directors of Dissidia) and even if you hate the existence of Lightning Returns, you can't deny Yuji Abe doesn't have potential to become a great designer.
Really, the only bigger weakness for Square Enix at the moment is their writing side (they need to not let Toriyama near a text document ever again, or Watanabe). They could really do with having more projects like Bravely Default where they hire from outside the company, even for their biggest projects (or ESPECIALLY for their biggest projects).
