But I do not agree in the slightest.
It is a good reason to RP well.
I would not say RP rewards have a huge impact on the game.
But they should have some impact. Should a warrior get a third legacy if they are really well RP'd, hellz yes. Should they get a Quest form, quest spell, quest skill, a custom piece of equipment? Yes, I would say that any character that is really well RP'd should get cool stuff. You do not have to agree. I am not asking you to. But that is part of the game I enjoy. So why break parts of the game that are actually fun for some players?

I wonder if it is that you do not want to put that kind of effort into the game and therefore you think it is unfair that someone else who does gets some sort of reward out of it. Because that is the only logical explanation I can think of as to why. But without rewarding good RP you are left with just another PK mud where morons run around with little to no RP. Sorry, I do not think your argument is valid at all. And I am not that sorry.

A declining playerbase has little to do with that. People get tired of any game. Even the best games have a declining playerbase over time. Look at all major MMO games. They hit a peak then slowly decline from there. Are there still people who play WOW? Yes. Are they all the baddies? Yes. XD It is amazing we have a playerbase at all for a niche game like this.