Basically, the Alliance was formed because neither wCw or ECW could have really worked on their own. ECW had most of their big stars that were around towards the end, but they still only had 10 guys or so. Meanwhile wCw and WWE had many more guys and even women so they could have easily squashed the new faction.
Additionally, the star power and numbers that ECW did have was needed to add to wCw. Because WWE rushed the whole angle, it really suffered. A true wCw invasion would have had Hogan, Sting, Goldberg, Nash, Flair, and Jarrett leading the faction along with Bischoff being the head guy like Heyman was for ECW. Alas, this was not the case as there were so many contract issues and they couldn't persuade any of those guys to comes so we settles with Booker T as wCw's #1 guy. This also led to having Austin and Angle join the Alliance to raise the faction's star caliber.
So why weren't the ECW titles around? Because the whole angle was rushed by Vince and their just wasn't enough there to legitimize being it's own separate faction and making it a 3-way war like we'd have wanted to see.