Shall we take this topic into the realm not often ventured?
Castlevania will never be a big seller. It isn't marketable to a wide audience. The series, overall, is dark and gothic. If we take a look at what is popular, based on sales, this is never the case. Mario, for example, is more or less a cartoon. It will appeal to young and old alike. It doesn't contain any graphic violence, another point in it's favor. It is simple, easy to get into, and addictive. Castlevania doesn't contain any of these elements, save for being addictive. Konami knows this. It is in the business to make money. Games are not classified as "art", so the top selling point and purpose of any game; is it marketable? Look at what they tried with Dawn and Portrait. They kiddied up the artwork, decreased the dark and Gothic tones of the storyline. This is more or less all they were able to do, so that it could still be called Castlevania. There isn't any way to remove the violent aspect of the games, it is tied into it's mythos after all. Mario has created it's own mythos, one that involves magical talking mushrooms, turtles and sentient chain balls. By this very fact alone, Castlevania will never be popular. The vampire and monster mythos has also had a large slice of cheese associated with it, but that's just it's nature. While Mario is bright and cheerful, it isn't necessarily cheese or dramatic, it's very light and sweet. But that is another point in it's favor. Whether we like the stories presented in Castlevania games or not, they just ooze cheese from every pore. Most of the time, it's over the top and especially dramatic.
It is a difficult series to market. Konami changed gears again with LoS. They attempted to tie into what is popular in the western gaming front. Unfortunately, they're just creating further confusion among the gaming audience. Casual onlookers who were hooked with the DS installments, are not interested in a new series facelift, especially one that has become even more gothic, dramatic and darker still. Fans who have stuck with the series between it's constant shifts and turns, are puzzled as well. Castlevania doesn't necessarily have an identity. It's alright to borrow from mythos, but what Castlevania has been known for, from it's roots, weren't particular strong traits to begin with. Let's take a look, and break it down to it's simplest form.
Side scrolling action.
Cheese-tastic gothic storyline and setting, borrowing from European vampire mythos.
There's not really much to go on. Side-scrollers are no longer popular. Even Megaman won't pull in the numbers it used to. It was a creation based on the limitations of the hardware, and while the GBA and DS titles maintained this tradition, it was far removed from the level based static gameplay of the originals. As for the background mythos, it has become overused, watered down and mainstreamed to the point where people no longer take it seriously or care (ie: Twilight, ugh). Castlevania is no longer tied to any particular history or evolution. It is thus, no longer marketable. Hate to make it sound so depressing, but thus is the nature of the videogame industry, and it will become even more so as time goes on and profits become ever more important.
In an ideal world, where videogames are indeed art, an expression of an individual, an idea brought to life, Castlevania could be re-examined and brought back to life. If I were a director, I would take it way back to it's roots. For Konami, it's a series that doesn't seem worth the hassle. It doesn't bring in lots of cash and isn't particularly marketable. They are continuing to spin it in different ways, ones with the least risk, and I think HoD is a good example of that. Keep the development costs way down, and still sell it to the DS crowd, since it's essentially the same game, using the same assets.
My two cents.