I think they made some mistakes this year, and some last year, and a large amount of mistakes piled up all the years before:
E3 was meant for two things, if what I've read about it's history is correct: The media to pick up all that's new and unfolding in the electronic entertainment industry, and for video game retailers to decide and order merchandise for their stores in bulk, as information appears on the merchandise, specifically the Fall and Winter hardware and software.
I've been to a couple of trade shows before, nothing near the scale of E3, though interestingly enough, one in the same place PAX is now held, but for medicine. I can see that at the core, the idea behind the two is supposed to be the same, but what you see with E3 doesn't exactly do it's duty:
Imagine you're at the supermarket, and all the Coke products are in one area. Now, all the Pepsi is right by it, in another. Pringles has a spot, so does Prego, so does Heinz, so does pretty much every brand name. Now, imagine you're buying almost all the groceries you'll need for a year, and Coke wants you to sign up (at a slightly lower, but noticeable rate) to drink a certain about of their soda from now until the end of the year. Pepsi wants the same thing. All of the sections in the grocery store want you to do that. So they do whatever it takes to get your attention, in hopes it'll phase your choices. They offer free samples, have games with prizes, give away popcorn, whatever it takes to get their audience's attention, to order their product in mass numbers.
That's what I'd describe a tradeshow as, in my experience. Only, E3 has a few detractors: Due to the nature of the industry, people get excited about new news, and so reporters are necessary. In one way, you kill two birds with one stone by attracting reporters and the people who sell the actual retail product at once. On the other hand, the salesman is trying to figure out a specific number of units to pick up, while the reporter is trying to capture more and more buzz about what's going on. How do you figure out which is more important? It's too tough to manage.
What should be done? Perhaps the event should have two sections: A show section and a trade section. The show section would have demo units, lines, and opportunities to watch video and play demos of games. One Day 1 and 2, retailers have access to this section. On days 3 and 4, reporters do. Then, the second section would be the trade section, and would offer similar service to both groups. Reporters begin here, and can give interviews, ask questions, and watch developers and publishers show off particular "niche" moments of their games, things that couldn't easily be done in a video or demo. Then, retailers come in, and they can ask questions, barter prices, watch those niche moments, and decide what to order, ultimately.
This allows the media a chance to get all the ooohing and aaahing without being too bothered by retailers, and the retailers a chance to really figure things out in what could be an efficient process. You'll have all the space and all the opportunity that's had the way things are now, but on the "Trade" section, retailers have to put some effort into seeking out what they liked or wanted to know more about the day before.
Of course, I don't know much about the trade part of the show at E3, as it stands, but if mixing the two doesn't work, separating them, but maintaining the look, feel, and spectacle of E3 shouldn't be too tough, I wouldn't think.