I think this is one aspect. The other one that was cause for the demise was the lack of sound economics, as strange as it sounds.
At least from my and my families perspective everything was great as long as the economy was doing fine.
Why should back then anyone care about ethnicity or religion as long as everything was provided for. The society was egalitarian since the socialist government tried hard to create unity by this ideology of making everyone equal.
If you think about it it's not that different than what is depicted the Star Trek society, just with waaaay less technology.
Once the economy went downhill, which is inevitable with that kind of economic ideology people lost their belief and hope in the socialist ideology and went looking for something else. (Nationalism, Religion)
But in the end we should not loose sight of the fact that nation states are also just an idea. So are supranational states that are the current trend (EU, EEU) and who knows what tomorrow's trend may be.
What did not work in a national state might in a supranational state or some other organization form because each one comes with its own type of unifying ideology.