It's a slightly shocking realisation that the park were running three, full-scale Vegas-lite style shows per day just two decades ago. While I think you're right that they weren't always profitable, they made the park feel better-rounded and also benefited from coach groups year round. Interestingly, I always thought that BPB felt more like a resort park back then, even before the hotels. Food and entertainment offered much more diversity.
If I were to attempt to sympathise with the park, Hot Ice has long been part of the fabric of BPB. The show is usually of a very high-quality, even if it's evolving aesthetic had felt dated for years now. Eclipse was always a much better show with broad appeal, and Hot Ice felt like Amanda's personal vanity project even when it was burning cash next door to and alongside Valhalla.
No BPB visit for me this year, so I'm not able to comment from on the ground, but I get the impression that this period for the park seems even bleaker than that immediately following WGT's death in 2004. For reference, I thought the park offered a better product than Alton not so long ago, but those days suddenly feel as distant as the optimistic casino bid.
Saying all that, a Merlin management takeover would feel like a bleak outcome for the industry.