It sorta seems like you're just making up what you want to be the story, because that's not what the facts support.
Merchandise sales dropped and stagnated while
Dragon Ball Kai was originally on the air. The instant it went off the air - which was, incidentally, the point at which
Dragon Ball Heroes really kicked into high gear - is when merchandise sales suddenly began to climb again for the first time in
many, many years. Merchandise sales were ALREADY dropping by the time
Kai came around, and at NO POINT during its broadcast did they ever recover.
Viewership doesn't mean anything in and of itself. You can have people that watch something, but if they're not buying anything (of either its own franchise products or its advertisers' products), there's nothing to sustain its existence. People watching something for free on TV provides no revenue stream; it's the supporting merchandise sales that make or break it.
We have a direct correlation with
Kai doing absolutely nothing to support merchandise sales here. Sure, let's not confuse correlation with causation, but... c'mon, now

.
Kai was a failure in pretty much all regards, domestically. The viewership dropped (again, noting that viewership in and of itself isn't really anything, but worthwhile to note), merchandise sales dropped, and it took external influences outside of Toei themselves for the franchise to pick up steam (read: make money) again. Toei then capitalized on
what other people had done by trotting out
Battle of Gods, and yeah: suddenly new material got the veins pumping again.
Side note: they started taking the
Kai branding off of merchandise before
Kai was even done the first time (Cell arc). It was that toxic.
We of course have to acknowledge that the international licensing revenue from
Kai did pretty well (if not great), but from everything we've seen and heard, they don't seem to even realize what they heck they're doing with the international market. They talk it up big, but then don't capitalize on it or even seem to remotely acknowledge it. It's disgusting.
We covered all of the financials in
our big Dragon Ball Kai feature from 2011. Rest assured, those merchandise numbers started going back up after 2011.
In comparison, for Bandai Namco (so we're talking pretty much all merchandise sales), the franchise did ¥8.9 in fiscal 2013, ¥11.4 in fiscal 2014, and ¥19.4 billion in fiscal 2015. Get rid of
Kai, support the franchise with new material, and suddenly we're talking again.
Pretty clearly,
Kai did nothing to help revitalize the franchise, and at worst, it temporarily hurt it. <-- This is all in Japan, but the way this franchise works, with no new interest in Japan, and with how insular and old-school they operate, without that internal Japanese interest revival, there was no hope...