In terms of how we got here... Well, if you start progressively turning a competitive, skill based, strategic card game into a vanity treadmill consisting of checkers with card art people stop finding it appealing and/or get burned out. I'd count myself among those "people". It's becoming really hard to convince myself this game doesn't just... well, suck. Sadly, that feeling has been progressively increasing since around the gold immunity update. CC didn't do much to improve the situation, in that regard. Unfortunately, I'm sure there are a lot of other people looking for checkers with Witcher themed card art. So my personal feelings on the matter are largely irrelevant.
Sadly, this pretty much sums up my view of the current state of the game too.
An interesting strategic card game, which I very much enjoyed, was thrown away and replaced with A.N. Other generic card game. It's not a terrible game, and quite a few people still seem to like it, but to quote Francesca, to me it's just "meh".
Player skill plays a less significant role nowadays. Long-game strategy has been largely replaced by short-term tactics. The whole thing just feels much more shallow. It is a game designed for a more casual audience. The recent confirmation of the mobile version explains a lot.
In Beta, with most balanced decks, you could at least compete in most games, even if you didn't draw the exact cards you wanted. In HC, too many things are binary in nature. Without the right cards in your deck and the right draws, on far too many occasions you might as well just skip to the next match.
The uber grind of Pro ladder doesn't appeal to me, so ranked feels pretty pointless now, it's just casual with better matchmaking. Casual might as well not exist. Arena is too random and unbalanced to find enjoyable competition there. Seasonal at least offers some interesting variation, but the novelty wears off after a bit. Worst of all, like you said, the whole aim of playing now seems to be tied to a massive grind in the pursuit of vanity items. Most of which are pointless. Card backs are nice, but you hardly see your own. Leader skins are uninspiring (and again you see your opponent's better than yours). All the boards are much of a muchness - and mostly consist of a patch of mud surrounded by fluff hidden in the darkness. Trinkets are even more pointless now that borders and avatars don't appear in game. What's the point now of grinding for that hard earned avatar that had just the right amusing taunts you wanted?
From a poor start, HC has at least improved. For a while I was still optimistic that with time CDPR could rediscover that lost something that the earlier game possessed (despite its flaws). I figured that it would take at least another 6 months and hoped that the lessons they learned during Beta development would help guide them. Today I am much less optimistic. The direction of travel does not look promising and potential changes that they have now ruled out don't leave much scope for a turnaround. The fact that they keep making the same card design mistakes doesn't bode well either.
If I didn't care, I'd have left long ago. Sadly though, it is looking like this game just isn't aimed at players like me anymore, and I'm just going to have to accept that. Hey, at least all that time and money I spent during the Beta means that I can have all the nice pictures to look at, albeit non-premium from now on. If only I still wanted to use them to play cards.