Bellator's issues were plenty and by now are obvious:
1) They didn't put on enough regular MMA. They held shows once or twice a month on average, that's never going to be enough. You can't even start to catch up to the UFC when you can't match their output, let alone overtake them. That's a fail.
2) When they did put on cards they obsessed over babysitter booking that literally nobody gave a fuck about. They figured "sign an NCAA talent or an undefeated Russian fighter and feed them cans". Nobody wants to watch those kinds of fights, not even the hardcore MMA fans. That's a fail.
3) They were right to do away with silly gimmicky tournaments from the Rebney era, but they weren't able to book competitive cards. Yes, they had to manufacture their own stars, but the way they tried to do it was insidious. Just book competitive shows with fights that might hold some intrigue, not can-fests with preordained results. That's a fail.
4) They also built the wrong type of talent. Dana White and the UFC literally showed them the way - you don't throw all your weight behind boring ass wrestlers because as soon as they start fighting top talent, their fights SUCK. That goes for Americans, Russians and any other nationality of 'super dominant wrestlers' that very few people ultimately want to watch.That's a fail.
They got it right when they tried to make guys like MVP and Diego Lima stars, but they had Michael Venom Page on their books for 10 years and produced maybe 2 or 3 interesting fights because they were so obsessed with babysitter booking. That's an incredible amount of time wasted booking fights where MVP was literally a -1000 favourite. Why even tune in, just catch the highlights later?
Ultimately, outfits like Bellator, ONE and PFL shouldn't even bother pretending that the UFC is their competition until they can start to match one thing: "Regular, high quality, competitive cards".
No gimmick will ever close the immense gap that already exists, only incessant, single-minded quality MMA booking will ever do that. And it is possible unless you lack the imagination and ability to do it.