I'm still in doubts of this being the main factor as all the other factions had to deal with the same issue, too, and still could achieve something.
I agree with your assessment here.
Corvus Belli surely didn't help with their insistence to stay on a railroad plot. The introductional narration, which negated several of the efforts that had been undertaken during the Flamia campaign (and even alternated some factions actions into something that really never happened), was the first hint that the overall narration of Wotan would be independent from the players games.
It was at the latest confirmed when a glitch on the Strikezone page during the first week of the campaign showed the LaForja- Platform being destroyed and broken up.
I found this approach of Corvus Belli very strange: to set up a narrative campaign structure without giving the players a chance to have a direct influence on its progression and outcome.
If you look at it from a levelheaded point of view, all they had offered (and wanted to provide the players with) was a background narration, new missions to play and an archive to file battle reports on. Also soft achievements without effect in order to keep players attached.
And that's it.
For the second time again.
All this is something you could put into an expansion-book as a background chapter to help players write their own private groups campaigns, but it is NOT a good approach to organize a global campaign!
For the general player it is not enough an incentive to stay attached.
If you run a campaign in which you "demand" a certain amount of effort (writing quality reports which are needed for your factions progression is work beyond the usual fun play indeed), you as a campaign organizer have to give the players something back for their work. And that is immediate feedback via moderation and palpable effects that resulted on the participants operations.
This includes a frequently updated battle diary of the campaign by the organizers for all to see beyond the theaters tables and narrative conclusions of the respective phases based (only) on the factions actions.
Giving out prices has a very small effect on motivation as these are pretty exclusive due to them being restricted to just a small number of participants of the whole community.
If you as a campaign organizer detach yourself from that and your respective players then you take away the reason for them to play in your little sandbox - hence the exodus of that high amount of players that happened from the start of Phase 2 onward.
The overall scenario of the human nations fighting each other, when very clearly a known hostile alien force is approaching, is and never was a good idea for a story set-up of an INFINITY campaign - even if it is a somewhat excusable way of bringing all factions together for this kind of structure.
Putting the unnecessary inclusion of an alien threat (in this games universe) aside - yeah, it sells models for the xenophile players and collectors - open warfare in a setting of proclaimed superficial stability in a human domain seems downright contrived, especially since this game is always advertised as a conflict simulation in which specialist teams perform black ops for their own factions shady goals behind these factions allies backs.
INFINITY players never expected to play a 40k or FoW version in a Postcyberpunk setting, yet for the campaigns they kinda have to.
Personally I'd rather like to have a less territorial fixated, but more objective orientated campaign being set up, where factions want to achieve some ultimate individual long term goals by sabotaging, stealing from or even supporting other factions via Black Ops.
You could place an objective map on an Überhaus layout for example and say that Haqqislam wants to enter new trade deals with Tohaa in exchange for their alien Biotechnology, which is something PanO is very wary off, so they want to sabotage it by killing Tohaa ambassdors or spoiling the spice harvest that is intended to be shared with the Alien. All the while YuJing wants to undermine PanOs presence on Svalarheima, by sabotaging either the Blues shipping lanes or facilities power generators output.
All this could be shown in a kind of influence scale (or table) for each respective faction that in turn activates in game bonuses when a certain amount of success or games numer is reached (Tier).
You could even put it in relation to other factions progressions and take away opponents bonuses again, if the aggressors effort is high enough. (I am looking at a structure like Elite Dangerous Community Goals and Power Play)
This would keep players engaged as they have a constant direct feedback on their factions actions, even without input by moderators. The cherry on top of the cake would be a proper moderation and fluffy comments from the campaign organizers' side in order to keep up the hype.
Also I think the campaign was still too long.
6 weeks would have been enough to keep players attached without exhausting them too much.
OR a structure where you have an active block of two weeks playing the campaign being followed by a recreation block (of again one or two weeks) in which no game is played, for a total of 8 weeks of the campaign.
The latter also goes better with "the wife side" of life.