Look I'm not a huge fan of how the Titans have been handled, and frankly I think that for the majority of the clubs' existence the club has been terribly run, especially the way that the Titans seem to treat their engagement with their community, and last year when the club was for sale it should have been sold to new owners instead of letting the old guard continue in charge of the club when they have consistantly failed so many times before.
However in saying all that the mere PR of removing the Titans from the GC alone would be an enormous disaster for the NRL in the current climate. I'm not normally one to play the AFL card, but in this case it really is a factor, and if the Titans were to be moved out of the GC it would be a propagandists dream for the Suns, the AFL, and their friends in the media, and they'd very quickly make the NRL look very, very bad if the NRL were to remove the Titans from the GC, even if when you got down to it that it was in the NRL's best interests to do so.
If we're being honest the Titans probably shouldn't have been brought into the comp in 07, in fact looking back none of the bids at the time were really any good and the game probably should have bided it's time and waited for a better option to come along, but in saying that the Rabbitohs should have been kicked straight back out of the competition in 04-05 once the the ruling that got them back in was overturned, and by rights the Chargers never should have been kicked out of the comp in the first place, so innumerable mistakes have been made over the years that were all factors leading up to the predicament that the Titans and by extension the NRL are currently in...
Anyhow, the way that the Titans have been run is terrible (but to be fair they were going great guns until the global financial crisis happened and there's no reason why they couldn't turn it around), and a lot of mistakes have been made, but I think we're stuck with them now and that it's in every bodies best interests in the long term to persist with them, even though we'll certainly suffer in the short term.
They do desperately need new management or at least to attempt take the club in a new direction (but the NRL seems to be against letting that happen for some reason), and a re-brand wouldn't go astray either if you ask me...