Yes, and this is where White Wolf learned the major problem with games that use a metaplot - in practical play, many people go with the core rulebooks, and they only apply those bits of continuing metaplot that they like, if any at all. So, while you say that storyline events destroyed the majority of the setting, the fact of the matter is that those storyline events probably didn't happen in many, or even most, games in play.
This is my experience. We used bits and pieces of the metaplot here and there and ignored it for the rest. This differed from chronicle to chronicle, of course - my Mage 1e/2e chronicle was fairly close to canon in many respects, but my Revised chronicles less so (the current one doesn't even have any Traditions or Techies, for example.)
So, when they changed the rules to incorporate those events that weren't used, of course there was griping - I think they weren't used for a reason. Forcing them on the players is then a bad idea. I think WW had a bit of a blind spot, in that regard - they should have done a little more research, and found out what was actually getting used, rather than assuming that their metaplot was actually the functional part of the game that should drive design.
I'm of mixed opinion about the rules reflecting the metaplot changes. On the one hand I didn't much like having all the changes to Spirit and the Umbra shoved down my throat with Revised. On the other hand, those changes are absurdly easy to ignore, alter or revert to the rules of 1e or 2e. And on the
other hand (yes, I have three hands - it's an old Paradox flaw), there are times when I'm really glad to have the option to mix things up a bit where the setting is concerned. (In one game, for example, a powerful angel died in the Umbra close to Earth and I was pleased to be able to use the mechanics for the Avatar Storm to represent the effects of this event, even though the classic Avatar Storm never occured in my game.) In the long run, I appreciated having more tools added to my toolbox. It gave me the ability to have the Umbra as a dangerous place, a sparkly haven filled with happy unicorns, a set of demented dimensions or whatever else I fancied. All good in the long run, I think, but a bit of a shocker when it first appeared.
Given that none of us have sales figures, I take this as an unsupported assertion from a random person on the internet. Without actual data, it is a terribly weak argument.
There was an (apocryphal, I guess) story back in the day that, for a period, the Mage 2e corebook was outselling any other WoD book, even Vampire. (Which led to my favourite WW loony conspiracy theory ever, namely that Mage 2e was replaced with Revised because the top dogs at WW preferred Vampire and were
insanely jealous of the success of Mage. Priceless.)