I think the "new version every year" just keep them motivated and set them some target. Otherwise, if they were to work on their regular basis and release it only when all engineers are completely confident it's ready, we would see a major setback in development speed.
I agree, I prefer to have better polished and bug free OS than more functional one but the current situation is just a compromise between these two values.
I just think Apple could find a happy medium between following a regular release cadence and spending time polishing and fixing bugs.
Everybody can agree that an operating system is a complex piece of software that will never be bug free. But I just think a 1 year release cycle is too short to maintain a high release quality for a modern OS.