Agreed. I would suggest that it was Funakoshi circa 1924 that began to 'change' the karate he had learned in Okinawa to better fit Japanese needs of the time. Certainly he is responsible for the Dan/Kyu system in karate, uniforms, standardized curriculum and I would say a more sport element.
As I've discussed in the past, Itosu was a college professor. He developed the Pinan katas that clearly have two different bunkai teaching methodologies. Furthermore, he was responsible for getting karate into the school curriculum of Okinawa. But that version of karate was 'simplified' to a more block/punch/kick format by necessity as school children don't need to know the more 'nasty' aspects of karate.
Fast forward to WW2 and the sudden influx of allied troops (and liberated Koreans). Suddenly, once Imperialistic karate masters have to teach these allied troops (the invaders by their perspective) in order to make a living. What are they going to teach, the adult end-the-fight-right-now-by-doing-the-most-damage-as-possible-in-the-shortest-amount-of-time or children's karate? By and large it was children's karate which the troops took back home after their tour ended. It was this form of karate that was morphed into sport.
Older traditional karate clearly has chokes, ground fighting, joint locks (destruction), cavity pressing, sealing the breath, misplacing the bone and other elements obtained by heavy Chinese influence. These elements can't be morphed into sport as they are outside of a rule set and have more permanent results. Whereas block/punch/kick fits in perfectly with competition as it can be scored.