Eh. Not so sure about that last one.
As much as we want to criticize about our past, and it is so easy to do...I will agree with Scarlet Pride in that we really don't know because we weren't there.
My understanding is that there was a plan for Livingston and this was part of that vision. So I can't agree 100% with your first two points.
As for the third, if the original seating capacity was built I think it would have been more than enough. So yes, in the long run if we stayed good maybe the 9K we ended up with would not have worked.
And even with what we ended up with, there were some big or big enough names who played at the RAC in the early to mid years. I think as other venues were built it hurt.