I would rather them really polish Lion than to release some "new" OS.
What? Who says we can't have both. I have a feeling that most (if not all) of the fixes in Mountain Lion will make it into Lion. After all they aren't that much different.
The main reason Apple is doing it this way is because they have the App Store, so they actually can release a bunch of stuff that has been in the oven as a OS update.
I expect it to retail for like $15 too. So far this update is not even as big of a jump as Snow Leopard was to Leopard.