@Zhalmed Pawo, you say: I feel that the Tibetans pretty much destroyed Vajrayana by taking internal personal practices and twisting them into external public policy.
Are you a Tibetan? I hope you are, because I'm not and it's difficult to talk about a whole nation without being a member.
No matter what, first thing is, I don't think that Tibetans had the power to destroying Vajrayana, it would be horrible for the world if they'd had. After all, precisely because we are in the age of degeneration Lord Buddha came to our world and taught Tantra. So it comes with the territory. On one hand, we are in an age of degeneration and terrible things happen. On the other hand, because of being degenerate, this is a blessed age, the one where Lord Shakyamuni appeared and taught. And I doubt that anybody has yet the power to overcome the wishes of that great one who eons ago made the promise to come here in our age and teach Vajrayana. Even if prophecies of doom are right we still have more than two millennia for the holy teachings to last and prosper.
For the rest, you are absolutely right about the public sphere and the Mantra vehicle.
One optimistic note about this would be to think that what historians point out is true: that those titles as Chenrezig, Mañjushri and even Tara, awarded to the chiefs of state in Oriental countries, are not at all Vajrayana practices but mere courtesy hyperboles. Like the Emperor of Japan being the eternal grandson of the Goddess and every time an emperor is established he has to spend his first night as emperor making love with his august grandmother? I don't know, maybe he does. But I tend to think that mostly the explanation is in the hyperbole. It reminds me of Je Pabongka calling the DL the King of the Conquerors ... what else could this be if not a court thing, an hyperbolic title? Never in the world anybody could ever be seriously called the king or overlord of all the Buddhas. The Buddhas being of one mind, this is quite obvious. The problem is, I have the feeling that many Tibetans tend to take these things litterally, particularly in the special situation post 59, where it probably felt good to think that no matter what they could rally around a mythical father, Chenrezig himself ... powerful stuff, but psychological, not religious. In the West no doubt these things also became entirely self-existent, totally true, and the PR apparatus from Dharamsala together with Hollywood and the Western Academia didn't help to bring things into perspective, on the contrary. The God King was too tempting to grab at and made the stuff of our dreams so the religious part got confused, mixed up, and whatever.
It seems clear to me that the problem is in the institution itself of the DL. Lord Buddha received alms from and helped the kings of this world as a Teacher, but he renounced the position of political head of his kingdom, and his future as political Chakravartin or universal emperor. Lord Atisha practically spat on his political heritage and fled from his parents in order NOT to become a king. Lord Tsongkapa didn't even accept an invitation to visit the Chinese Emperor. So our Teachers made this quite clear. I know how Tibetans love nowadays their DL, so I always hesitate to say this, but there is something basically wrong in the mixing of religion and politics, as you point out with your own words. The tragedy we are witnessing in the Tibetan Sangha and the Tibetan community is the result of this mixing. The whole Tibetan system has experienced a meltdown. But this might not imply a meltdown of that sacred vehicle. Or so I hope, with all my heart. After all, our Teachers entrusted a group of us that is not mixed up in Tibetan politics with the teachings, and part of the Sangha of the big monasteries is hoping to entirely become free from their political fetters. So there is hope, I hope .....
This post is not in opposition to yours, I agree with your basic position. I just interpret the terrible things that are going on from a lighter point of view, in order to think that the heritage of Lord Buddha is going to prevail and last for a very long time, beyond the crazy things that we have done with it.