I agree mostly with what you said. For the sake of thoughtful debate I will make two points:Sheamus spent the whole year getting over by mentioning how he eliminated HHH. Kane got his biggest push ever, going over Taker repeatedly. Now both of them are back, and those situations were basically ignored.
This isn't news to anyone, but it's seriously affected the psychology of this matchup. It makes it feel like the WM match is just on an island storyline wise, like it has no connection to anything. And it doesn't.
I'm not sure any two stars are big enough to pull that off, but definitely not these two.
Both of them needed to come back earlier. Instead of one 5 minute beatdown, and a pedigree through a table, HHH should have come back during the Elimination Chamber PPV, broke his way into the chamber, dragged Sheamus out of it and beat him within an inch of his life. (Just an example of how they could have done it, without bothering to have them feud)
When Taker reappeared on Smackdown, it should have been in the middle of one of Kane's matches. I'd have had the lights go out, Taker appear in the ring grasping Kane's throat, with a coffin at the side of the ring. Kane would fight back, grab Taker's throat, appear to be overpowering him, then Taker would laugh in his face, grab him, Tombstone him, and roll him into the coffin. (Again, just an example)
Both Kane and Sheamus would be done until after WM, and considering they aren't really doing anything with them anyway, why not?
Start the HHH/Taker feud by having HHH attack Undertaker from behind with a Sledge the following week on SD, and you go from there.
HHH needs to BE in sadistic mode for this story to work, not just show us highlights of times in the past when he was in sadistic mode.
1.) While having Undertaker come back on SD to attack Kane makes more sense storyline-wise, it does not make sense business-wise. WWE wanted to take advantage of ratings by hyping "a surprise" return on Raw.
2.) I disagree that they're not big enough to pull it off. They are. This is almost always the deal with Undertaker matches at WM. They don't need to go anywhere. They just need to be one big, cash-grabbing, attention-getting matches that will make people buy the PPV. When's the other time in the last 10 years that Undertaker had a meaningful match at WM that wasn't just about the streak? WMXXIII vs. Batista for the WHC and WMXXIV vs. Edge for the WHC.