I'm not about to get into a huge debate on Smogon's behalf as I've become disillusioned with their tiering policies and general conduct myself but it's no secret that I am (or was) an active Smogon user so I suppose I'll explain why I was attracted to Smogon in the first place, and why I have, for the most part, left. I'm not even really sure this post belongs here as it does kind of straddle the line of off-topic and I know Smogon is kind of perceived as a "competitor" to Serebii, even though they really aren't anymore, so if the moderators don't feel it's appropriate feel free to delete it. However, it does seem to be a topic of discussion at the moment and I'd like to offer a different perspective than one you'd typically get from either the "pro-Smogon" or "anti-Smogon" crowd.
I read the whole thing, and honestly, that is a very insightful, passionate essay on how you feel about it. I've questioned about the divergent evolution between Smogon at least since I started participating in VGCs, and Generation VIII seems to be where it's diverged far enough that I find myself scratching my head sometimes about why some people question Game Freak's choices for certain aspects of competitive play when they were never meant for the Smogon rules to begin with. For the record, I began with Pokémon Battle Revolution, whose online play was more or less identical to the main games' Casual Battles play today. As a result, THAT was my foundation, and it's why I'm more comfortable with picking my 3 or 4 Pokémon during Team Preview. (I started playing way back in Generation I, but there was no online play at that point, and I just played against the other kids interested in challenging me. At least until one of them threw at me a Nidoking whose stats were all 1,023.)
Note that I don't inherently dislike Smogon. What I dislike is that, as I mentioned, discussions about competitive Pokémon battling outside of Smogon seem to assume Smogon rules, which don't necessarily work if the person taking that advice intends to use it in the actual games. That's what grinds my gears--they are being given bad advice without either side even knowing it, and it's hard to find good advice on the matter. Making it more impenetrable is that there is a lot of advice that's good for both, but it takes an experienced eye to know what isn't. The result is people being told to use, say, Skarmory with Stealth Rock, Body Press, Whirlwind, and Roost and them taking it into Sword and Shield Ranked double battles, not realizing this is not what this advice was meant for. They get crushed left and right before they even reach Rank 3 and have no idea what they're doing wrong or why their opponents, who aren't using this advice, are always at an advantage.
YouTube seems to be the one place at the moment where there's a lot of advice pertaining to the Ranked formats in the official games (with double battling rules being identical to those of VGCs, albeit best 1 of 1 rather than 2 of 3), and predictably, there is a rift between Smogon and the PokéTubers who give that advice, even though there shouldn't be one because they're talking about what works under different sets of rules.
If there is a general decline for Smogon, I haven't really seen it, considering the vocalness of competitive Pokémon discussion outside of the site making it seem like it's something everybody follows. There is an almost religious reverence by some people of the site, not all of whom are actual members or participants, which I find a bit baffling.
For the record, I think the general ban by Game Freak on Mythical Pokémon is because they're limited in availability. They aren't always obtainable, so Game Freak doesn't allow them in most official formats because they likely consider it unfair against those who missed their chances to get them, whereas everything else is always available. I see it as similar to modern-day fighting game tournaments of Marvel vs. Capcom 3 and the Ultimate version thereof, which ban Jill Valentine and Shuma-Gorath because they were limited-time characters--they were available only as DLC, which is no longer obtainable. Consequently, those two characters were banned because people who got into playing MvC3 after they were obtainable would be at a disadvantage against those who did, as they can neither use them nor practice against them. Pokémon Showdown doesn't need to worry about that because the Mythical Pokémon can be generated out of thin air whenever the player wants.