My $0.02 (at least as it pertains to sportbikes)...
I think it depends on the bike and the manufacturer.
If it's a big seller or a "flagship" bike, the mfr's usually tend to it more each year.
Look at the Suzuki GSXR750... they must've released several iterations of it since the debut of the water cooled model in the early 90s.
Also case in point, the CBR900RR- when it first debuted, people talked about how "un-Honda-like" that bike was. Rough, a bit quirky and somewhat unrefined by typical Honda standards. Over the next several years after its intro, Honda supposedly went and made gradual refinements to the bike right up until the Y2K 929RR debuted.
As far as being drastically better each year... I don't think you'll notice *that* big of a difference, not unless it's a major redesign we're talking about.
Lastly, there are also problems that the mfr's will address with each model. Such as the alleged instability with the Suzuki TL1000S which resulted in a steering damper being slapped (kludged?) on. Probably all models get some minor adjustments between year one and subsequent model years- to correct for problems and to refine a design.
Before I take up more bandwidth, let me point out that H-Ds have gone with the same engine for ages. Remember how long the Evo engine stayed around before the Twin Cam 88 came into the picture in 1998?
Oops... this is SportBikeWorld... hehe. Don't think y'all will know/care about those archaic air-cooled 45-degree V-Twins...
Have a good Fourth `o July folks!