Better question.
Why does the KKW need to survive?
Why does any large organization need to survive? So long as its membership is well served, the organization will exist unless external factors impinge, such as the Korean IRS. Can't say that I feel particularly sorry for the KKW leadership: they aren't idiots and they have lawyers, so it isn't like they didn't know this was a possibility. But as they say, you ride the gravy train until it stops.
Regarding the membership being well served, lets face it, the vast majority of blackbelts issued by the Kukkiwon are to suburbanite kids who quit once they receive the belt. They are well served: all they wanted was a plaque, a card, and piece of black cloth. They received it. Only members such as myself, who actually care about what those things represent question how well the organization serves its membership, and we're in the minority.
no seriously.
what point does it serve?
It serves to provide a standardized curriculum that every practitioner learns, so that a blue belt in any member school anywhere in the world will have minimum training in a specific skill set and a specific body of knowledge. That's the intended purpose at least. You and I both know the reality. If the KKW were to truly live up to its intended purpose, then my answer to your first question would be very different.
Setting aside the fakes, scams, McDojos, and such, it benefits the genuine schools and instructors by providing them with a credential. Its one of the reasons I
chose to study in a Kukkiwon dojang. Now, in my case, the quality of the instructor was first and foremost. Being someone who wants to open my own studio, credential is another little benefit that I can offer to potential customers. Some people have a mental need to see a credential from a big organization. Perhaps they've been burned, or perhaps its just the way that they are about investing time and money. So for the school owner, it does provide an umbrella so to speak.
Frankly, that is the only true benefit, though to be fair, in terms of operating a school and dealing with the public, it is a
huge benefit. The benefit to the art is more indirect in that it provides another credential to legitamately good instructors who are spreading the art and keeping it real (can't believe I'm using that expression, but so be it).
The laundry list of problems is a lot longer than my post, and I don't pretend that they're not there. If the organization doesn't survive, then life will go on, we will continue to train, and schools will adapt. The public doesn't interface with the Kukkiwon anyway. They interface with the school. The schools will likely handle the transistion invisibly, charging the same fees and either finding another organization to be affiliated with (USAT anyone?), forming their own, or simply being non affiliated and keeping a greater portion of the testing fees.
Chances are, if the Kukkiwon folds (I doubt that it will), they'll be reorganized into or swallowed by another organization. The size of the membership alone makes it impossible to ignore, and nobody is going to let all that potential cashflow peter off to smaller organizations.
Daniel