Kyo-ani is probably one of the most boring studios in terms of production though. Everything past 2009 just took a severe downward turn. SoL repeated ad nauseum
Nothing went wrong it's just that style of animation was popular then, KyoAni also can't be blamed for the character designs of shows like Kanon, Air and Clannad because the shows are adapted from Visual Key VNs. From 2009 onwards they just developed their signature style.
Keit-ai is just an /a/ meme, started out as a pitch that turned into a fanfic and then people made some fake trailers and add it to next season anime charts