I have a theory about why grimmification exists: how blue and orange morality always seems to get diluted and shat upon until it's good/evil.

It's the lack of predators in everyday life.
For most of human history, you could see predators doing their thing. You'd see the bloody results yourself. You'd hear stories from others.

Family dogs, cats, wild animals, etc. You saw predation regularly.
Your pet would bring you a dead animal. One of your goats gets eaten by a wolf. Your grandfather shows you a scar from a badger caught in his trap. Etc
And you'd be pretty much forced to acknowledge that these predators, from your housecat to the pack of wolves in the forest, don't have anything resembling human morality.
They're not only trying to be evil, but they can't even understand the idea.

You were confronted with blue and orange morality all the time, in normal life.
And then humans literally killed off almost all those predators.

Now, the most likely animal to kill you is another human.
Gone are all those daily reminders you're surrounded by intelligences that do not think like you, and which could not understand how you think.
The result: as humans drove predator after predator into extinction or endangerment, as they reshaped geography to be more and more hostile to them, blue and orange morality became more of an abstraction.
You could probably test this easily by simply looking at traditional fairy stories correlated with mcdonalds locations in a country over time.
Basically: blue and orange morality stopped being such a useful concept when humans became the only predators left.
Every satisfyingly alien morality eventually,13 sequels later, gets watered down into bland good/evil.

Imagine if No Country For Old Men had become a franchise like fast & furious.
This also explains why the only authors who write good fairies are without exception cat people.
And, it also explains why fair folk are recently getting a revival from their disneyfication:

Blue and orange morality is back, once again, in everyday life. Except this time it's corporations, not wildlife.
You may not remember the last time you saw irl a wolf eat a goat. Your cat is an indoor cat.

But you have a friend who got fucked over by their health insurance.

You donated to somebody's gofundme for healthcare.
The blue and orange morality of corporations are an obvious fact of everyday life to everyone younger than boomers. Just as much as any pack of hungry wolves ever was long ago.
And as corporations predate, using an alien morality absolutely at odds with human morality (or life), so have the fair folk stories started to become more relevant again.
Make another graph: traditional style fairy stories versus the number of medical gofundmes over time
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