With 1981 being the official formation of the WTF! The question now is why.. if prior to the Olympics?
TKD in the Olympics did not happen overnight.
Before WTF was the regulating body for Olympic TKD, its goals included organizing TKD into an Olympics-suitable sport, getting TKD accepted by the IOC, and positioning itself (WTF, that is) to be selected as the regulating body for the event. The process took decades and experienced much modification and re-envisioning along the way.
The political, financial, and even emotional investment by all the major players ensured that none of them came through it without significant changes and compromises. Even outside of the issues of getting TKD into the Olympics, IOC, WTF, and KKW have each weathered major re-organization, financial crisis, and apparent corruption of directors (which is hardly unusual for organizations of that size). Their current activities and directions for the future as they express them now are not the same as they were in the 70s.
And they are still defining their relationships and functions. It has ever been so and probably always will be.
For instance, I've gathered from threads on this forum that WTF was for a time handling its own certification of blackbelts (separate from the certification handled by KKW). I know neither the reasons for doing it nor the reasons for discontinuing, but it serves as an example of the changes and compromises that have occurred along the way.
I can hazard some wild guesses, though, for why WTF might have started certifying blackbelts:
1) Maybe IOC was uncomfortable with KKW, a private organization, having any direct control over athlete eligibility or would not want to recognize WTF if its ability to function was dependent on KKW's continued stability.
2) Maybe WTF felt that certification for sanctioned sport TKD seemed to be distinct enough of a product that it should be separated from simple blackbelt registration and perhaps wanted to head toward a sport-only certification, which would not fit in well with KKW's practices.
3) Maybe KKW preferred that WTF become largely self-funded through direct collection of fees or wished to ensure KKW's continued authority over TKD by guarding the fundamentals against the potential influence from foreign regulators.
Likewise, I can see several reason why it might have ended:
1) Maybe IOC was successfully satisfied that KKW handling the certifications would not give KKW any material influence over the sport, or perhaps they demanded a different financial model for funding WTF.
2) Maybe WTF determined that the advantages of the process were greatly outweighed by the disadvantages by making the administration unnecessarily complicated and creating reduplication of effort, and the issues that prompted it may be better addressed through other means.
3) Maybe KKW was losing too much in fee revenues or found satisfactory alternative compromises that would not yield unwanted effects to their brand.
I don't know. At its best, differences are worked out by intelligent and knowledgeable persons with a true passion for the betterment of TKD. At its worst, progress is derailed by political motivations, greed, or unreasonable resistance to compromise.
The only zero-sum game is the one where we all lose.
Dan