No surprise at all. All down to VERY poor management, from the logistics/operations side of things right through to product development.
Re loss of stock and not knowing what they have, no surprise, I've loads of stuff that they've sent to me as freebies when I've complained to them asking for repairs of faulty goods. Instead of asking for the faulty item back or for proof of purchase, or directing me to a service retailer, they just ship out a replacement free of charge. I've had a brand new DCC Elite controller, countless DCC loco and accessory decoders, a new chassis for a Flying Scotsman, 2 or 3 new loco bodies. The list goes on. If I were dishonestly inclined, I'm sure I could just send a series of complaining emails and get loads of stuff from them without even proof of purchase or proof of fault. Of course, linked to that is the other matter of why their DCC stuff was launched in such a poor and faulty condition in the first place needs to be asked and heads should roll for it.
Re lack of stock. At times, ebay and retailers are flooded with certain items from their range being offloaded at low prices, whilst it's impossible to find other items. Things that once flooded the market are now consistently out of stock everywhere. Why flood the market to get rid of core stock lines? Surely they should be keeping a regular flow of the bread & butter lines to keep retailers stocked up with a full range.
A classic example is the Thomas range. 10 years ago when my son was into it, we saw it everywhere, small retailers, large chains, ebay, online - there was a full range easily buy-able. I bought loads. Last year, I came to sell it as son had grown out of it, and made a profit on every single item, right down to trucks and buildings. That was because it's now rare and you can't buy most of the range anymore. Eg the Thomas Flying Scotsman which I bought from our local retailer for £75, I sold it a year ago for £150 used, and when I looked a couple of months ago, others had recently sold for over £200 used. Thomas is always going to be in fashion, so firstly, why did they stop producing it, and secondly why did they sell off all their stock in a fire-sale? I noticed there's no shortage of items from other manufacturers who make Thomas themed stuff.
At the end of the day, they don't know who their core market is anymore and aren't catering for anyone. If they want to compete with enthusiasts, against the likes of Bachmann, etc., they need to do that, make the high detailed and reliable stuff for higher prices. If they want to compete in the toy market, then need to scale right back to cheap and simple designs that are affordable for the mass market. I know they tried this with the Railroad range, but that again was hard to find - same scenario, some items were clearly being sold off in bulk and others simply weren't available anywhere, and the RRP of the Railroad items were still too expensive - they were just being too greedy with their RRPs and it backfired spectacularly.
A decade ago when I got back into the hobby, I was actually surprised how cheap things were and that they didn't seem to have increased in price too much since my own childhood. But looking at prices more recently as I've been selling stuff off, I can't believe how prices have increased, both new and second hand, presumably down to lack of supply. Hornby have really been negligent in selling off stock at cut prices, then leaving them with no stock to sell, and then letting others have the profit of selling stuff off now the prices have risen.