It all comes down to money\cost.
See they removed Police Academy because the stunt performers (of which that show had A LOT) were really expensive - they were paid the same rate as a movie stunt person (naturally so) and the HWSD show was a way to cut labour costs.
Unfortunately the guys who drove those cars were also professionals, and cost a bit too. Additionally, within the confines of the arena, there were bound to be collisions with barriers, and other vehicles from time to time, so the body work \ smash repair was also costly. The Mitsubishi Evos were high performance vehicles and required a lot of maintenance - especially the breakway car. We saw the jump ramps in the early show previews (up on two wheels, etc) early on but that element didn't appear regularly and was very high risk. I imagine that the show wasn't as cheap as they thought it'd be - and add on top the cost of rebuilding the arena to accommodate it.
They had to cut some parts of the show almost immediately as the chance of damage and the cost of repairs was just too high. HWSD2 was born out of a need to reduce labour and maintenance costs for the drivers and the Evos.
Cue Showtime. they've got their own crew, offer a fixed price contract (or at least they have done so elsewhere), and they're used to putting on shows on the show circuit across the country. It sure seems like a no brainer for Village to be able to offer a show without having to bear the risk\cost of damage and drivers. it's basically just outsourcing the show to a third party and letting them use your facility.
And that, ladies and gentlemen, is how the country boy from the outback came to compete with his city cousin in a set right out of an Italian village.
Long Live The Police Academy Stunt Show.