RB4 is a joke; you have to constantly DL 3 gig files to play, most of the features like sorting aren't there; the career modes and costumes are bare bones.
I should have just stuck with RB3.
It's basically an indie game in early access. If you're familiar with PC games on Steam, it's really not that unusual. Yes, they have updates that you have to download each month, but that's because they're continuously working on the game and adding features. Is it ideal that all of this stuff wasn't in at launch? No, of course not. But the fact that the game got made at all is kind of a miracle. Harmonix developed AND published the game...with Mad Catz as their only partner.
You should also qualify your statement. "Sorting" is pretty generic. You can sort by artist, song, date acquired, difficulty, etc. But the advanced sorting...like decade, genre (the stuff that you had to hit back and pull up that menu for), yeah...that's not there. It's definitely something I'd like to see improved, but it's not quite as barren as your statement makes it appear either.
As for whether the game "tanked" or it's "too little, too late", I feel like that's only relevant for the casual crowd. If you still enjoy music/rhythm games and still play RB3, those concepts shouldn't matter to you. Is Rock Band ever going to be the go to at parties again? Probably not. It's a very different world than it was in 2008. Do I give a shit that RB isn't trendy and cool anymore? No, I don't.
But Harmonix intentionally stripped the game down because it's all they could afford. They put out a foundation that could be built upon...and they're actually doing that. Once the next expansion comes out this fall, the game will be basically back to the feature set of RB3. And yeah, that took them a year...but again, this was a tiny independent team with very limited resources doing this. The fact they keep working on it at all 7 months after release is better than a lot of "AAA" games do.