Ah, I love reading posts like this. First of all, very well written. You're going to have to excuse my post for being not thought out, and just basically getting my opinions out there.
When I listened to SMYN 41, I started asking myself WHY we want to ban him, listening to them talk about how they didn't do it for Melee, so why now. I came to the conclusion that there was some factor, or a series of factors, that results in this. They also mentioned that Brawl has an easier mindset. But what is that mindset that makes it so?
This post got me to realize that the factor is exactly what you said, Sakurai extended government aid to the community. Now, I clearly wasn't here all those years ago when the SWF was thriving with Melee, but I can imagine how great it was. People probably joined to get good at the competitive aspect of the game, unlike now that people join just because they Google Brawl cheats, or see a video on Youtube that has a video they see as good. I honestly look at Brawl, and then I look at Melee, and see how pathetic it looks next to it. Heck, if I placed the cases right next to eachother, I'd want to move Brawl away from Melee, it's not worthy of it's presence. Now, a few months ago I saw a video...a Melee video to be exact. I Killed Mufasa. I was so stunned by it, I could hardly believe it.
I showed some of my friends, but they didn't see the beauty of it. I was shocked, I couldn't believe they couldn't see how AMAZING it was, how much training and practice it must of took to accomplish that level of play. I told myself I was going to give up Brawl, and learn competitive Melee. I already had wavedashing, L-canceling, and SHFFLing down, so I just had to get used to it again. I got home from school and played Melee for maybe 6 hours, stopping only for bathroom breaks and dinner. I'm not amazing at the game, and I honestly probably never will. Maybe in a few years when I can drive, I can go places and play Melee, but right now Brawl is more fitting for a person that can't get around.
In your post, I think you missed two aspects of why all this is the way it is. One, it's a new game and people want to play new games, they simply don't appreciate what you have to do to be good in Melee. Luckily, I got into competitive Melee maybe 5 months before Brawl. Now for point two, when a new game comes out, people want it. Especially kids that around 13 and up. This is where the community fails, we have teenagers who join because Brawl is easy, people that don't appreciate a challenge like Melee. People who don't have the means to get around places on thier own. (Well, now that was more of an add on to what you said but it's still important nontheless)
I sincerely hope Brawl dies and Melee comes back, hopefully in time for when I can go places. In the meantime however, I will play Brawl and try to ignore Melee.