This split was a factor, all right, but only one.
The Indy also got passed up by technology. In the late '60s, Andy Granatelli brought forth a new concept - a car driven by a gas turbine engine. It had 4-wheel drive and a lot more power than anything else in the field. Insead of getting 2 miles to the gallon, it got more like 6 and the fuel was kerosene which was much safer than the alky fuels the other cars used.
Trouble was that, among other things, it didn't SOUND like a racer. You could hardly hear it going by, so they had to impose rules that restricted them so much that they were uncompeitive.
Later, they had to put restrictions on the regular engines too, so the race just doesn't have the interest and innovation that it could have.
I'm sorry to see the race fade.