A little thing I noticed.

It's just a part of storytelling, especially when you've got a group of people working to put it together, with some coming and some going all the time. The Balrog thing was just a simple backstory for a quest chain to one person, but someone else came along and thought it would be interesting to investigate. Who knows, maybe that's happening now with the Nath castle there. The original designer just put it there to lend atmosphere, someone new has come in and felt it needs explaining. One of the most frustrating things about the lack of Masteria updates is that the first design team went to great pains to leave TONS of noodle incidents all over the place, and so far only a tiny fraction of them have been revealed.

Yeah, I totally agree. The development team obviously doesn't stay the same. Some people leave, some people join the team. Just look at Edelstein's design and hear its BGMs. Something totally different from what we've seen (.. and heard!) before, without counting the new concepts used for the Resistance's beginning.

I'm also pretty sure that the "death" (well, it's a big word, but it's just an assumption) of the Masteria development is related to what you said: the development team. The quitting of NxProse and NxJoeW who probably were somehow related to the development of Masteria (I've had the chance to private message NxJoeW on his YouTube account, the one with his GM patroling videos before private servers even started to exist, and he said that he was a game developer), probably had a bad impact on the development. While I don't want to make such assumptions and say that their quitting slowed down or completely stopped the development of Masteria, we're still sure of one thing: not only was NxJoeW a game developer, but we also know that NxProse knew about Masteria like the back of his hand, as he made a thread containing hints about the new expansions and made Q&A's, answering to people's questions about Masteria and other stuff. So he must've had a good role in its development.

Now, do you think that if, let's say, the storyline writer of Masteria content suddendly left Nexon because he got a better job offer, that might slow down the Masteria development? Who knows. One thing is sure: the quests' storyline wouldn't be the same anymore. Another fact: since NxProse and NxJoeW left the Nexon Development Team, all the storylines of the quests of the exclusive stuff sucked (see: Haunted House expansion). That might be another reason. They might have the content ready but can't find someone who's good enough at writing storylines for it. OR the designer could be the problem. If the old one quitted and, let's say, didn't even leave or think about his plans for the future areas of Masteria, how do you think they'd be able to continue the development? I doubt they had EVERYTHING in mind when they made Masteria, like how every single area and expansion should've looked like. They'd have to find someone to do that, which isn't as easy as it seems, especially when they don't want to disappoint users, after the AWESOME Masteria content we've received until now.

And, let me say one last thing. If we gotta keep making assumptions, then I'm going for the lack of a good storyline writer. Why? Simple: they released the Crimsonwood Keep Party Quest without any quest which would explain how Jack got inside the Keep or anything about the Party Quest (you only learn about it once you're inside). It gives you a weird feeling, entering the Hall to the Inner Sanctum and finding Jack, then clicking him just to see him say "You need to be the party leader to form an expedition". That totally makes sense. The only quest which was released was "Cool as Ice", and, even if it explained many things, it still wasn't enough in my opinion. In fact, NxProse said that there were still some quests on their way, and that they should've been released soon. They never did. It always kind of looked like a "rushed" release to me.

Then, the fact that since the release of Crimsonwood Keep Party Quest, we haven't really had any exclusive quest with a complex storyline. The Visitors' one isn't even that complex. Not as much as the NLC / Phantom Forest ones. Therefore, yeah, that's the only possible reason which comes to my mind right now.