Rehiring Barlow was a terrible mistake as it ended up with him leaving after the insanely mediocre Crucible of Man album. Hmm... Barlow also quit after the equally mediocre Horror Show.
I instinctively wanted to disagree with your assessment that he ruined IE by rehiring Matt, but after some thought, I only partly disagree. However, I don't think Matt was the cause by any stretch, merely a coincidental player in the sequence of events. A few thoughts:
1) No vocalist could've saved "Crucible of Man," the songwriting was uninspired and the album lacked energy and intensity. It's honestly a bit sad that Jon saved the Something Wicked storyline for so long because of label issues and whatever else, and then the final product ended up being subpar.
2) Ripper would've eventually moved on anyway, whether by choice or not. He had songwriting aspirations with Beyond Fear and we know how it goes when a member of Iced Earth wants to be a songwriter.
3) Barlow's return and subsequent departure served as a necessary transition period for the band from the tumult of the mid-2000s - Jon's neck problems, label changes, somewhat stagnant popularity as a headliner that couldn't break through to new fans - to a far hungrier version of the band today. Say what you will about the direction that Jon has taken the band, but the period that Matt was back really reinvigorated Jon and he seems to be far more driven now.
Personally, I think Stu is inferior to both Matt and Ripper in the context of Iced Earth, but they've been reaching new fans through far more persistent touring as a support band - something that didn't seem to be on Jon's mind during the Ripper era, and something that wouldn't have been logistically possible with Matt. I think there are a lot of things Jon could do to improve the band and their output, but the evolution of the band from 2008 to 2010 probably extended IE's lifespan.
The one thing I will say is that I'm tremendously glad I saw them in September 2010 in Hollywood, at what ended up being Matt's last US show with the band. They were absolutely on fire, played a crushing setlist, and it was easily the best IE show I've ever seen. The performance of "A Question of Heaven" they did that night still gives me chills.