Yeah XE was already sorta at breaking point already; aki's hacking just pushed it over the edge.
The tension between VU and ULK was part of it, but mostly it was a story of individuals. At the time, Tical and I ran the server, with Sephiroth pitching in every now and then. HeAD had wanted to give me his position (overall management) in early 2010, but I was busy creating SvM, so the job rested with a barely-active Akiharu instead, and SGB remained owner, as he was paying the bills. I joined management later, after I'd written the new script. With HeAD, SGB and Aki largely inactive, Tical, Seph and I shared responsibility.
Tical and I got on very well, but neither of us much liked Sephiroth or Aki. Not many people, ULK or not, liked Aki, truthfully. Seph was a seasoned sycophant, who would lick anyone's ass for a seat at the table, while Aki was a megalomaniac, who would dispassionately take any step he thought necessary to preserve his grip on power. Tical and I had our differences, especially when it came to positions on racism and hate-speech, but we saw Seph and Aki for who they were: insecure, volatile and self-interested.
Things were bound to get fucked up at some point or another. Occasionally Aki would poke his head in and try to assert his authority, often croney-ing in Bishop or Prontera to the management team to defend him or cast their votes when he was outnumbered. (In the case of Bishop, Aki couldn't have known how much of a significant own goal this was going to turn out to be.) He worked in a way that was fundamentally against the principles that guided XE as a project, which he could only have sustained for so long. Eventually something would have happened, and, his opaque and anti-democratic ways of decision-making would have pissed enough people off for us to split.