There may be a bit of rose colored glassiness to our admiration of Ballets Russes.
I have seen 16 revivals of ballets produced by Serge Diaghilev therefore I can only speak for what I have seen. I would be happy to watch each one of those ballets again and again, but not necessarily year after year. They are definitely much more than watchable than many works that have followed and they remain important art works of the 20th century.
Of the other 32 ballets Diaghilev produced, which I have not seen, many were never meant to last and were in a good number of cases staged as little more than a pièce d'occasion because his "special audience" did not go to see ballets over and over again as they have done in succeeding years.
These ballets were all performed by outstanding artists and those ballets that I have seen revived by the Royal Ballet, Festival Ballet and Western Theatre Ballet, were all given in highly successful performances
re-inforcing their historical status.
You write, “I don't have my notes but according to Alice B. Toklas and Boris Kochno, the audience had changed greatly by the mid twenties -- the smart people weren't going any longer."
One reason, is that both in London and Paris some were dead or older, the First World War change the pattern of behaviour of the upper class (I don't understand the expression "smart people" which sounds journalese), with many of them having lost family members. There were also societal changes and "new money" changed the audiences by the mid-1920's.
You also say,"...and the real innovative work was being done in Russia," What evidence is there of successful ballets surviving or were even staged in Russia in the mid 1920's.
Furthermore, when you write "-- that's why Diaghilev commissioned Prokofiev to compose "Le Pas d'acier" and why he hired Balanchine who had cut his choreographic teeth on the Russian avant garde."
Successful and lasting ballet of the 1920's seasons were: - Season 1920 Le Tricorne ( Massine / De Falla), Season 1923 Les Noces ( Nijinska / Stravinsky), Season 1924 Les Biches ( Nijinska / Poulenc),
Season 1928 Apollon musagète ( Balanchine / Stravinsky), Season 1929 Le Fils Prodigue [The Prodigal son] ( Balanchine / Prokofiev).
Diaghlev had used the music of at least 28 different composers for ballets by the time Prokoviev arrived. It was his policy to bring variety of musical styles to his audiences, not his desperation that brought about Prokoviev's employment.
How meaningful is it to measure a work which is not comparing like with like when you say/ “but does "Sheherazade" -- as much as say "La Bayadere"?" Scheherazade holds up very well if given in an excellent production which in my opinion has not been seen since the 1960's.
The tragedy of this discussion in the case of the RB is that a academic classical ballet company would go out side their genre to stage so called modern works that could be dance be modern companies.
I truly can find no logic in having dancers study at school for eight years then the slog of regularly going to class to maintain their turn out and technical vocabulary only to be asked to perform a kinf of modern dance and not a ballet.