If it was me and "the billing dude" (who happens to be a billing chick, thank you), then yes, GS would be considered profitable, maybe even approaching "wildly" so (although if it was just me and the billing chick, I'd give her a raise and increase what we pay out to the GMs a great deal and then if there was anything left over, I'd give myself a raise, too).
But, we have an IT dude. We have a dude that deals with databases (billing, character, etc.). We have a dude that handles the game guts (engine, compiler, etc.).
Yes, those people also contribute to DR, MO, and AOH, so we're still doing pretty good. But, you're assuming that's all we do and it's not. Like most businesses, we don't choose to just sit back and be content, so we are constantly working to develop other products and therefore that means we have to work on other projects. So that means we have an office, complete with all the costs Sleken mentioned (and plenty more he didn't). We have an office manager. We have a business manager. We have a full development team. We have an audio team. We have a large (and very exceptional) art department (whom we also get to use for the IFE games, too). We have a QA team.
All of those things cost money and as other people have also pointed out, despite the fact that the player-base has diminished, those other costs have either stayed the same or increased. So, we run quests and pay events that give some players many things that they feel might make their playing time more enjoyable, but are purely optional. These are things that a lot of people want, but no one needs. We do everything we can, however, to make sure that everything you need in order to play and have fun is available for your basic subscription costs.
Would things be different if Tiny Heroes or Fantasy University or One Epic Knight were pulling in hundreds of thousands of dollars of money a year (or a month)? Pretty much definitely. Ditto if Dragons of Elanthia had taken off (::rimshot:
. Until we develop and release a Puzzles and Dragons or a Clash of Clans, however, we put what we can back into the IFEs and continue to put the bulk toward new development, because if we didn't do that, we'd never manage to develop our Puzzle and Dragons of Clash of Clans.