Apparently founder Allen DuMont did not have a good eye for talent, was a techie, and a brilliant one, a good businessman for what he did prior to going into television broadcasting; after that, not so good. Weren't most of DuMon's shows broadcast from New York? I doubt they had much in the way of west coast facilities, which limited them to early live television. Unlike DuMont's radio "equivalent", Mutual, the baby network never moved on, gained much in the way of affiliates, which made their producing a national hit of major proportions a near impossibility. Captain Video was, I believe, their biggest hit, but they produced a few others as well. I think Fulton Sheen was with DuMont for his first two or three seasons, and he was huge, however his "audiences" was mostly in major cities and was, I suspect, better known than he was watched in those early days.
Didn't DuMont do some negotiating with Walt Disney for the still in the planning stages Disneyland? What ended it was from what I've read was ABC's access to large amounts of capital that made their offer the one Disney couldn't refuse. Walt needed seed money for his new theme park, and DuMont either couldn't or wouldn't put up the cash. It helped that ABC was an NBC spinoff, had executives who knew a thing or two about broadcasting. DuMont needed to hire top talent. Television broadcasting was much more difficult than the radio kind. A hit radio show could be broadcast from a phone booth. The visual aspect of television made studios, and fairly large ones, a necessity. In its very early years even the major networks produced their shows on the cheap, with many if not most broadcast live from New York.
In the end it came down to the Big Three for television. It sort of had to go that way, though for its first decade syndicated shows of the kind Fred Ziv and others like him produced gave the big guys a (minor league) run for their money, they didn't make a serious dent in network broadcasting, were mostly a diversion. The growth of third rated ABC probably contributed to the demise of syndicated shows, as you alluded to in your post. For me the larger issue is why Mutual remained an exclusively radio network. DuMont was a one off put together by indie outsiders, but Mutual was a major player in radio, had, at its peak, more affiliates than the Big Two put together! They focused more on smaller affiliates, smaller cities and towns, thus they had more stations lined up, though numbers can be deceptive. Mutual wasn't just news back then,--they were entertainment oriented as well--and they had some major hits.
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