Great OP.
The problem is that, until only a few months ago, most RL people, including many on here and most administrators, including PVL, were of the belief that the gap between AFL and NRL was not growing. Even PVL, after his first season in charge and a good look at all the metrics, is now aware that the hundreds of millions that the AFL spent in NSW/Qld on Suns/GWS is now paying dividends in terms of participation (massive gap and widening), ratings (small gap but growing) and attendances (maintaining the already huge gap). Rugby League has been in denial for way too long. If the sport does nothing, it is inevitable that the gap will continue to grow and one day, be it 20, 30 or 100 years, AFL will be number one in all states.
Though I agree with what you are saying, I don't think it is fair to say that RL is in denial about it.
The vast majority of the people that matter have understood what's been going on for decades now, they just either haven't had the power or the will to do anything about it.
You should also never underestimate the power of self interest in RL. There are people in RL who would effectively kill it as a commercial product if they thought it would benefit them or their team in some meaningful way.
So the Rugby League needs to think big picture - there needs to be consultants engaged, symposiums, whatever, but a 20 year plan is required. Millions needs to be spent. Perhaps hundreds of millions.
Simply building new stadiums won't do it, Nor will Bris 2. Or expanding the women's comp. But these are good and obvious starts. RL needs to decide if they are a national code (which requires teams in Perth and Adelaide) or if they are content to try to just hold onto market leadership in NSW & Qld for as long as possible, before the inevitable decline that is now happening to RU.
Trying to hold what they already have would just put them into a war of attrition that they'd inevitably lose as other sports got bigger.
They have to be bold and fight back, and that means being entrepreneurial and taking risks, like decoupling the NRLW from the NRL so you have two products to sell instead of one and have a bunch more pro-teams to spread across the country to help sell the game.
I'm sorry, I couldn't resist lol.
They need to partner with NSW & Qld governments to grow the game at grass roots, before those governments are further seduced by AFL. The Vic govt puts millions into AFL grass roots and stadia, because they know that there is a return. On average there is one non-VIc club in the AFL GF each year, and that means 20K - 30K fans travelling to Melbourne. So, this shows that there are ways that NRL clubs in WA & SA can benefit NSW. I was previously of the opinion that strengthening the heartland should be the priority, but the game must become national as a matter of urgency. If there is not the player depth, then go the relocation route. Use the Swans as the blueprint - they are drawing 10K to games here in Vic (wearing the old South Melbourne jumper) at a time when crowds are down dramatically. So it is possible to keep the old fans whilst growing the game in another state. Get the WA/SA govts and some wealthy backers to put up big bucks for a team to relocate. $20m - $50m. Make sure that they keep the history, jersey, etc, six - eight games in Sydney, with memberships covering those games. The game needs a radical shake up off field. This should be PVL's area of expertise. Instead he has been fiddling with the game on field, something he knows very little about.
I don't have faith that RL people can detach themselves from their emotions enough to make relocations work. They'd focus too much on the past instead of the future and turn their new potential market off as a result. I can just imagine the Daily Telegraph running annual articles of rumours of X returning to Sydney and the damage they'd do.
I'm much more in favour of clubs being relegated and their license being given to new entities. That way the club that gets the boot still exists and operates more or less how it always has, and it creates the opportunity to build the lower tiers into legitimate alternate products that can be sold in their own right (see Newtown's growing success in the NSW Cup). And trust me as a Bears fan, standing alone in the NSW cup is way better then the merger was...