I still recall the days where they made actual pies and cakes. They had refridgerated cakes and pies at the front counter along with eclairs. Presentation was everything and there was no sloppiness when it came to the icing on the donuts like there is today.
That said, I recall when they first started selling sandwiches in the 1990s. It was a big deal and designed to compete with Druxys, Country Style and Coffee time who were at the time selling packaged sandwiches.
They are great but their prepared foods will be their downfall. The reason Starbucks works so well is that they don't make sandwiches, bagels and everything to order, they take it from the fridge and heat it up. What you get is what you get. They focus on coffee and it works well.
Tims on the other hand has the made to order sandwiches, bagels etc and half the time they are improperly made or not very edible (think overtoasted bagels). I have yet to go to a Tim Hortons where someones order was not screwed up (Bagels, sandwiches, soups, etc).