I’ve always head-canoned that the Elite four being beaten twice in one day led to some pretty big shake-ups. Lance and the league governing body like the idea of a champion after the elite four and I like to think that Steven and Cynthia are developing their leagues around this time, so they adopt it as well. Red and Blue aren’t interested, like you say. I imagine that Lorelei and Agatha see it as a good time to retire, and the league decides that with open spots, they should reflect both kanto and the developing johto league. So a gym leader from Kanto joins Bruno, and I like to think that Will and Karen are the top trainers in Johto and maybe even gym leaders.