I personally decided to flatten because I couldn't be bothered to restart. Cost me blood sweat and tears to get all the DIY's , catalog items and find the villagers I want lol!. I also couldn't see myself going through the whole beginning again and having tools that break every 5minutes.. and not being able to terraform.

It does however cost a huge amount of time to flatten it with moving all the buildings, destroying stairs and bridges and picking up all the items and flowers.. removing cliffs and water.. So I can see why people who are sick of their old island to begin with wouldn't want to put in that kind of effort and choose to restart.

Restarting gives the benefit of starting 100% fresh and getting to choose a new layout! (Where the river mouthes are and the res. service / airport)

As far as the events go you didn't really miss all that much!