UGC has been rapidly dwindling in player-base for years now. I played in UGC's final 6v6 season and that only had 5 teams (including my own) for my region. Not to mention for the past 4 or 5 years the respect for UGC has declined and I don't mean that about the staff or anything, more so just any team competing in it. A long time ago UGC had actual teams competing for 1st place, taking the league seriously but after a while that stopped being the case, why?
Better Alternatives
There was a period in time where the only option for NA players to compete was either ESEA (paid) or UGC (free) so of course it had a decent amount of players... there was no alternative. Then there was the gap between ESEA closing down and RGL running 6s leagues (previously only running prolander). So REALLY the only option for 6s was UGC. Now we are in a time where you have the option to not pay to play (newcomer/amateur) in RGL and the option to pay (intermediate and above). With most players making the switch to RGL, UGC found itself bleeding. Not to mention that the option was always there for European players, to compete for free in a more respected league.
The Divisions Were Wiped Out
Previously, UGC offered many divisions so that players from all skill levels could compete fairly and against similarly skilled opponents. I believe it was Steel, Iron, Silver, Gold & Platinum. I remember around 5 years ago, a player I played 6s with said he was able to get TF2Center advanced access because he played in UGC gold, keep in mind back then the requirements for advanced lobbies on TF2Center was much stricter. Over time, as the player-base declined, there was no reason to keep the 5 separate divisions.
Premiership vs Open
The last season ran only platinum, so you could be an open ETF2L team playing vs a premiership ETF2L team and that was normal. I recall asking a highlander team why they no longer competed in UGC, given they had played some 20 seasons in silver/platinum. The reason? Because they were bored of losing to SDCK (the best highlander team of all time) every season. For reference, this team commonly competed in division 4 ETF2L.
Lack of Respect
UGC used to be a respected league, the winners were respected, the participants were respected. You could show up in a pub with a platinum medal and people would stand in awe and pocket you. Well, maybe not to that level but it was a sign of skill. It used to be that UGC divisions were on par with other leagues but for all of the reasons above that stopped being the case. The league was regarded as a joke. If you played in UGC over the last few years then most likely you would just be playing with friends who were on different ETF2L teams.
Default Wins
It was a common joke in UGC that teams could make playoffs through just default wins alone. Extrasolar, rest in peace, achieved playoffs in multiple UGC 6s seasons by achieving only default wins & got 6 default wins in a single UGC season. That was at least 4 years ago. It has been a long time coming. Either through your opponents forgetting that they had signed up or it came to and they just couldn't be bothered to play, it was standard.
Medal Issues
Obviously as you mentioned UGC had some troubles with getting their medals into the game and to player's backpacks. This resulted in a multi-year backlog of medals waiting to be received by players. There is no doubt that medals hold significant value to players, it's one of the most commonly asked questions in leagues & cups... Where are medals? So when you have a league with literally no reason to play and you aren't able to provide the one thing keeping it alive, it will die.
I loved UGC, before I even played competitive I knew the significance that the platinum division held. It's a massive shame that it is gone but in fairness it was a long time coming. Competitive is dying, at least in Europe, the divisions have halved in size over the last 5 years and the level of said divisions is rapidly declining. The players competing in Division 3 now would have struggled to compete in Division 5 a few years ago. It's a matter of time before the fate of UGC becomes a reality for other leagues. I think we are still a long way away from that happening to the same extent but the process that UGC went through is already happening. I am very fortunate as a mapper trying to get maps into competitive that there is alternative routes now that UGC is gone. RGL has been very supportive with their experimental cups, regardless of how seriously people take them. I think that NA players in general are a lot more open-minded to running different maps, the same could be said for ozfortress. These leagues have ran non-standard maps for a long time now and have been massive pioneers in getting new maps into the rotation. ESEA was the first league to have process in a standard season, RGL has played maps like clearcut & villa, which have barely if ever seen the light of day in Europe. Ozfortress has ran badlands/prolands at least somewhat recently, I'm not aware of the exact details as it is literally the other side of the world from me but I believe its fairly popular.