Bischoff had never had that kind of success before and didn't have the mentality to handle it, so he went apeshit and slowly killed the whole company. He's no Vince.
I think this is the best succinct answer. It's true Bischoff started bragging how Vince Mcmahon was the 90's version of Verne Gagne in terms of being out of touch.
What ended up happening was Vince Mcmahon saw what made wcw become successful and took it up another notch.
NWO angle of wrestlers against the establishment was used in Austin vs. Mcmahon.
No more comic book characters like Duke The Dumpster Droese and The Goon and more wrestlers with actual names.
DX bringing real backstage elements on screen just as the NWO was doing with Hall and Nash and Hogan.
From a business standpoint when Vince Mcmahon made his public company to battle Ted Turner it changed the war as now the company could sign the big names that they couldn't before. Soon after Big Show, Jericho, Radicalz, and so on get signed. The wwf before going public couldn't sign all these people.
Bischoff and WCW really were a juggernaut, but they didn't have long term planning. The wwf was still drawing strong outside of USA as mentioned. Bret Hart was actually going to be used by wcw to expand into Canada which is why some of that whole Montreal incident went down the way it did. Bret partly didn't want his stock being lowered.
In the end though WCW not having their own plans ended up costing the company. Just because attitude worked for wwf didn't mean it would work for wcw audiences. They should have known that trying to emulate the wwf didn't work the same way or be as successful when Hogan came in and was getting booed within a year. Then doing the 80's angle.
WCW started winning when they were original with the nWo and Hogan's heel turn. In the end though as mentioned the company couldn't do anything if Time Warner/AOL didn't want anything to do with it, but they were on a big downfall anyways.