Olympic Games have been used before to underline the power and greatness of a nation - look at how the 1936 Games were used propaganda-wise, so I don't think this is a new phenomenon. What has definitely changed is the importance of live events on TV. In the German speaking area in the 80s to the 2000s, Saturday night shows were popular that gathered the whole family in front of the TV (I'm just saying "Wetten Dass..?"). Due to on demand entertainment that can be perfectly tailored for the desired target audience on Youtube or similar platforms, such TV events have simply lost their importance.
