Man this is really nice story but can you please somehow contain your wall of text next time, it's kinda hard to read.
My impression was that BSB always preferred to lock end game content/win at any cost more than actual pvp fun, probably cus some people take this too seriously and cannot accept losing from time to time in exchange of having some fun, they take it like stain on their ♥♥♥♥ing honor or some ♥♥♥♥.
One part you got wrong is that REDS couldn't really contest Teddies after they merged with hcp guys, so that was decisive point when large scale pvp truly died (about same time when REDS lost castle). Both teddies and hcp were weaker than reds on their own (teddies slighly weaker, although wiping them in dominion in marianople hero hall had to be painful), together they were way stronger so yeah.
One thing that's worth to add is that REDS broke mainly from internal conficts of people with oversized egos than anything else.
I don't know why teddies died though, anyone tell meh? Boredom much?