On paper, I think Tess made sense heading to NYC, as she was a big fish in a small pond in Corinth. They really made her so unpleasant though - some of the soap magazines at the time panned the show for having her blackmail Ally with Steffi's role in Gwyn's death.
B&E were never very warm writers - their tenure on Loving is cold and their new characters introduced on Loving were all aggressive and hard. Loving had had dark periods before, but this was balanced out by a longtime cast viewers knew and cared about.
It's logical, I guess, to have a show based in NYC that isn't kisses and cuddles, but onscreen, it was not likely to bring new viewers or keep the Loving viewers.
They did try later on to have a somewhat warmer atmosphere, but by then it was too late.