I don't think conflict is particularly worse than it ever has been. If anything, the development and release of new conflict systems has led to a surge in conflict, while other aspects of the server, such as ST, have fallen far behind simultaneously.
I don't think mods are at fault for any 'poor handling' of conflict. I think they do fine given a tough job. It is simply that there is not much else to do in LOTC at the moment. Eventlines are rather scarce, and the ones that I've seen hosted are essentially equivalent to player events. The world is not immersive, and you cannot find quality RP without being within a particular RP group. It is true that the new conflict systems cause nations to be more based around conflict and less around pure RP, but I wholeheartedly believe that if this was supplemented by a more active, living, and breathing world, that no one would think it too much of a problem.
I don't think that being raided every once in a while is the death of RP. The current raid cooldowns are pretty sufficient. On the other hand, ST definitely needs to be jumpstarted, but I do not know if that means that there is an inherent issue of the server contained there.