I don't even think anything is really wrong with the ASG. Getting players to really compete like it's an actual game is a pipe dream. Fans just want to see guys throw down alley-oops and whatnot anyway.
The nature of the ASG has changed markedly in the past two years; it was never a defensive showcase, but it resembled an actual basketball game until recently.
Supporting that assertion with data: in the 2000s, 8 of 10 ASGs had between 240 and 285 total points scored, with a high of 300 in a 2OT game in 2003. This decade:
2010: 280
2011: 291
2012: 301
2013: 281
2014: 318
2015: 321
2016: 369
2017: 374
Offense is up in the NBA generally, so older historic norms may be irrelevant, but if the league could get the over/under down to 320 or so, that would be real progress -- and would suggest that the teams were playing at least a modicum of defense.
That said, ASG ratings have been flattish over the past decade, so you may be right that fans don't care. My counterargument would be that while national NBA ratings (including the ASG) are steady, local ratings are down sharply in many markets, and often not in ways that are easily explained by cord-cutting or the fortunes of specific teams. If you're trying to market the game so as to win back less engaged fans, making the ASG more interesting is a relatively low-effort way to move the needle in the right direction