This seems like a necessary reset, especially given their very high valuation.
I personally enjoyed most of Udacity's Self-Driving Car Engineer Nanodegree. The content was great and at the time I had a very supportive mentor (gutted they got rid of this feature). Moreover, they have managed to build a large community of current students and alumni who keep in touch even after the nanodegree is over.
I would suggest they reduce the number of courses they offer and improve quality. I tend to see them as a more "premium" MOOC but I do agree that quality of content is variable depending on course.
Another area they should naturally look at is training for employees in corporations. I really hope Sebastian Thrun can turn things around.