Sell-Off only really applies to the publisher.
Right - as long as the product is out of the original licensee's warehouse by sell-off date, they're good. I think we're saying the same thing here.
[If one was inclined to be slick, one could try to create a legally distinct but wholly controlled entity to purchase any remainders from the licensee and essentially sidestep this limitation, but I would guess I'm not the first person to come up with this idea and it's prohibited in one way or another.]
This all coincided with the burst of the Dot-Com Bubble that built up in the mid-to-late 1990's, and then popped early-on in the year 2000.
The particular meltdown I'm thinking of was later than the dot-com bubble. The anime/manga market in the US (which is all I can speak to first-hand) got oversaturated in the mid '00's, and a number of companies over-extended themselves. When the mortgage bubble popped and rippled out in late '07/early '08, the market pulled back, and ADV was one of the more prominent casualties of that. I'm thinking the sudden loss of many willing partners on this side of the Pacific, coupled with the increasing expansion of the underground channels as broadband internet continued to make inroads, drew the Japanese publishers' attention to the 'problem' in a way that it hadn't been before. Clearly it didn't bring their full wrath down, but it at least got it on everyone's radar.
(They knew about it before this, of course - go watch 'Battle Programmer Shirase' from 2003 for an early industry acknowledgement of the Western audiences watching fansubs.)
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I am curious to see how Sony plays things - they have a considerable amount of potential integration (and very deep pockets) at their disposal, so if/when they actually get their act together and start taking advantage of it, they may be able to set up a model that gets emulated elsewhere.
Or maybe not. I'm also curious if the Japanese publishers are going to continue to let the Koreans take the lead chasing DMCAs across the globe and just ride on their coattails for a while longer.