From what I understand, the death knell for the WCW was the AOL/Time Warner merger, which necessitated the power shuffle that saw Ted Turner, the promotion's only real champion, installed into a sinecure and removed from the active decision-making process (This is why we really haven't heard from him in the last decade or so, compared to his ubiquity in the 1980s and 1990s). So there are two possibilities: either prevent AOL from getting involved in conglomeration (unlikely, given the culture of American businesses in this era), or tweak the merger in some way so as to have Turner retain a great deal more power and influence. The possibilities for butterflies are enormous, because it could dramatically alter the business plan of one of the largest media conglomerates in the world.
You touched on a big part of it. However, the death of WCW had a number of factors not mentioned.
1) Egregious storylines
Examples: David Arquette wins the WCW championship, Fingerpoke of Doom
Let's not forget there were other issues at play. Hulk Hogan had creative control over his character, which put him on television quite a bit. Eric Bischoff rode heel Hogan through a ratings boom, but he did not quite seem to know when enough was enough. Unfortunately, there were a number of very talented performers who were buried thanks to the New World Order storyline that overstayed its welcome.
Then the promotion went off the deep end. Storylines became a joke as did the championship. While anyone who follows professional wrestling knows these events are scripted, events like the Fingerpoke of Doom or giving the title to David Arquette just helped send fans to the competition. The WWF was not exactly that much better in those days, but there were more reasons to feed money into McMahon's machine.
2) Too many roosters in the hen house
Examples: Hulk Hogan, Bret Hart, Ric Flair, Sting
We also had some problems with a top heavy roster. WCW tried to alleviate this problem with
Thunder, but you still had the problem of
Nitro being the place where the major storylines developed. Someone like Bret Hart could have been a major force as a primary face or heel. With Hogan pretty much established as a face, Hart could have been the natural choice as a heel.
But wait a minute. Sting was the franchise and riding a wave of renewed face popularity. Ric Flair was still bankable in these days even though his prime was done. Hart's entrance into WCW was wasted on a cheap knockoff of the Montreal Screwjob (see StarrCade '97) and a feud with Ric Flair.
This top heavy roster also hurt the development of younger stars within the promotion. For every Bill Goldberg who received a big push, guys like Chris Benoit and Chris Jericho were not getting pushes. WCW handled the push of Diamond Dallas Page extremely well, but botched Bill Goldberg's push in many ways.
I could go on with this subject and I'm hoping you get the sense of how WCW collapsed under its own weight.