WWE had a ready made Tuesday night wrestling audience because of Smackdown Live on USA from 2016-19. It made no sense at all to have NXT on Wednesday. AEW would be on Tuesday if it weren’t for Tuesday night basketball on TNT, shown by the ‘Tuesday Night Dynamite’ trademark that was filed when AEW started. NXT has too many white guys in their 30s and it’s running off the audience, and Cole, Gargano, Ciampa needed to all come to the main roster after Mania 2019 at the latest. They have a nice big diverse roster, it’s time to use that. I never thought I’d see War Games where no one at all cares but here we are
The Smackdown brand is more marketable and more recognizable to the masses than NXT. People know the name because of The Rock. There's no guarantee that NXT would have got even half that if they were on Tuesdays.
I remember WWE ratings and attendence suffering because of having 4-5 days in a row of wrestling. That's part of the reason why Smackdown went to Friday.
Tuesday and Thursday were out for AEW because of Sports. Putting the show on Monday or Friday wouldn't have been good for them.
USA had nothing really on Wednesday so they put NXT there. WWE would still need USA's approval to get on the station.
NXT's current problem is too many guys who feel the same.
Another problem is the de-emphasis on characters and stories for in-ring. Io Shirai is a glaring example of this. She has what you need, but they aren't building personal feuds/stories for her to elevate her reign.
In the Dusty Era, they had more of a variety of characters and wrestlers. NXT in general works better as a developmental/feeder system for the main roster. I can name at least 6 guys who are overdue to be called up.
They have lost their identity by trying to be a super indy with a mainstream budget.