Very eloquently put, Nick. My best guess: Nichols was a bandleader and a hustler, who evidently loved making deals. He was perceived by his peers, perhaps rightly, as a cut-throat opportunist who leveraged a very successful career - the Victor / OKeh "Sugar" deal, for instance. This naturally put him at a remove from the men he hired. Sudhalter writes perceptively about the difference between players and leaders, how in the band business the successful and sober Tommy Dorsey and Benny Goodman were seen as combative and distant, versus how the lackadaisical and imbibing Jack Teagarden and Bunny Berigan were each beloved as "one of the guys."
I don't need to defend Nichols as a player and artist. His hundreds of records with Miff Mole and company are defense enough. He was NEVER a "Bix imitator" - not while guys like Jimmy McPartland and Norman Payne get a pass. Though Red got the broad outlines of his style from Bix, I would never confuse them - they are distinctly different from each other. I would also never confuse Red's strong ambitious streak and business horse sense with having a big ego. Listening to those same records, I do not hear a cornetist who dominates, but a team player who is amazingly even-handed with his sidemen.
I do think Nichols got lost artistically after 1929.