To me the main reason there's such a drop off is that WCW fans just didn't want to watch WWF programming, especially when it involved guys they used to watch in WCW used as jobber food on WWF TV.
One of the side effects of the 80s-90s explosion is that wrestling audiences were pretty devoted to their favorite group. A lot of WWF fans wouldn't watch NWA/WCW stuff, and most of the NWA/WCW fans grew up on the more realistic southern style and had no need for the more cartoony WWF style. WCW had its silly stuff, but WWF was always seen as geared more toward kids no matter how much Vince would deny it.
When WCW folded, a large chunk of their viewers were faced with the option of watching WWF programming or walking away from wrestling. Judging by the ratings RAW and SD get now, it seems almost all of them chose to walk away.