Yeah Owen was floundering even before the screwjob. The same night Austin came back and ran right through him despite being clearly out of shape and not really ready to return AND the obvious plan that he was going to the main event anyway, and Rock was getting the secondary heel role, so even if Bret went out in a better way, Owen I don't think was going to be doing much of anything in the aftermath anyway.
But in that immediate aftermath, it's crazy they didn't hot shot the title on to him or do SOMETHING with him. I'm talking like...a 2-3 week reign. You still could have done Austin winning the Rumble and winning at WM, still done Taker vs HBK at the Rumble, still transitioned to HHH vs Owen. Just have Owen win the title in that Raw match and drop it a week or two later with HHH interference. Would have been a great moment for fans, for Owen, for the Hart family, maybe could have thawed the ice with Bret a little sooner. Wouldn't have interfered with plans at all.