The main problem they had was that they had made some bad calls talent wise in the 18 months prior to this event and this is where those caught up with them. Flair coming in was fine, but guys like Rude walking out, letting Hennig continue injured for as long as he did and the stupid Slaughter title reign had all taken their toll...
The time period is somewhat similar to today, in that they had tried to push a lot of guys in a short space of time and it hadn't worked. They'd burned through DiBiase, Rude, Earthquake, Kerry Von Erich, Big Bossman and even Warrior and Undertaker with main event pushes in a 2-3 year period and either not followed through as in the case of Rude, Quake and DiBiase or gotten cold feet like Bossman and at the time Taker. Equate that to today's WWE and you'll see what I mean, they have Miz, Ryback, Christian, Wade Barrett, Swagger, Ziggler...
So Vince "pushed the panic button" and signed Flair, not out of necessity but cos he could and it would freshen his show, but he was more panicked that he'd lost Warrior and that Hogan wanted out...he "needed a new one" in that mould, so he hired Sid...It's the same now as re-signing Brock or Bootista.
You then have veteran talents such as Savage, Piper and Jake who had been sold a bill of goods that "their time" was coming. This means the roster situation going into those early stages of 92 and carrying on into Mania 9 were perhaps the most toxic locker room wise other than...well today's run up to 30. Does any of those last 3 sound anything like our buddy Phil?
WWE's mistake in 91 was wasting time with Flair - rather than headlining Summerslam with him taking on Piper, they put out a lame Survivor blow off to that "feud". Likewise, Summerslam 91 didn't feature Sid, Taker or Jake in anything more prominent than crashing a wedding or a ref spot.
Perhaps the wild card that ended our chances of the suggestions others made was Jake... he had been promised a role on the booking comittee and a major heel run. In many ways he was in the positon Bret Hart found himself in in 97. Vince turned him, didn't do it right by having him beat Warrior or even using the feud with Savage right and then when he questioned it was forced out.
Vince at the time wasn't focused on the WWF - he was getting the WBF off the ground and it shows in those 1991-93 shows. He's not been focused on WWE for a while cos of the network or rather, he is letting Trips do it his way... again distracted Vince...
So what was the decision that made this match not happen? I don't know if you can track it to one moment... but I always imagined it being comments from Hogan to Vince along the lines of... "So this is the great Ric Flair?", maybe after one of their early house show matches... or "Sid's not quite the Warrior is he?" not an off hand comment as such, but enough to plant the seed of doubt in Vince's head and start thinking Flair wasn't the guy to front the show... at some point we know he started talking to Warrior again at least.
That the match was first announced, then changed speaks volumes... Vince once again got cold feet on talent, only this time it was both of his "prize signings" in Flair and Sid. His relationship with Jake was in the toilet and Jake wanted to leave, the price for his release being jobbing to Taker...which Jake wouldn't have had a problem doing anyway - again Vince on the ball wouldn't allow that to happen for Jake to "get off easy" or Taker to turn so quickly face, but distracted Vince did so. Had they not sacrificed Rude 2 years earlier then I think he could have been facing Savage by then... perhaps in a career match or similar. Sid could have been facing off with Taker and of course Hogan v Flair... but it comes down to Vince not having faith in ANYONE practically ever... he gave it to Warrior, took it off him, gave it to Taker for 3 days, then aborted Bret's push for Hogan...it's continued almost unabated since... It is very rare for Vince to commit fully to a push at all costs... he didn't do so with Flair and it rather than Flair ruined it... At least in Ric's case he gave his word he could walk if he wasn't that top guy...he wasn't so Ric left... again, distracted Vince at his worst... smart Vince plays nice with Flair till he jobs out at Mania 9...Distracted Vince let's CM Punk walk before Mania 30...