I think a lot of this dissonance comes directly from the needs of City of Villains.
Classic City of Heroes was based around the idea that the great heroes of the past era were largely killed or depowered by the Rikti War. All that was really left were the tattered remains of the Freedom Phalanx, which once had a whole faction's worth of members and resources but was reduced to seven half retired, overwhelmed, or extremely damaged heroes, and the wet behind the ears and a little dodgy Vindicators. The Well was around in a much more passive way as of Statesman's early game/Web of Arachnos origin, as a Pandora's box that was implied to have kickstarted the age of superheroes when Marcus and Stefan managed to open it. The new generation of superheroes were the pcs and the active factions in game were all villains which got around the old rift between MMO players who like hanging out with sig npcs and ones who don't. The signature heroes were all in a bad way and helping train you up, so interactions with them were rare and special, climaxing in fighting alongside Statesman in the old Statesman's Pal mission. The well created the agency in humanity needed to defend against the threats of the superheroic age without being directly responsible for everything, which was a pretty okay compromise for a superheroic setting.
One very interesting bit from the available story bible is the remains of old builds, where influence was more directly fame and fame itself was empowering, which reads to me as a very greek mythic idea. I'll get back to this in a bit.
Then CoV became a thing and obviously you want to pit your freshly minted bad guys against the forces of good. And I think the writing really took a step up here in a lot of places, but it's also where the FP was on the mend and the Vindicators were coming into their own, along with older or defunct groups coming back (Vanguard as heirs to the Dawn Patrol, the Midnighters). This means you have more npc heroes doing things, and the core signature heroes have to feel as special and fun to fight as villain group AVs. They show up more, are more proactive. In some cases this is great: to me Ms Liberty only really got interesting when she started feuding with her grandfather on the direction superheroing should go, a really interesting idea they pretty much dropped in favor of killing Statesman. The City of Villains era might have the strongest setting level writing in the game but it also sets the stage for the NPCs to feel like the active movers on the board.
Cue the incarnate system, which makes the decision to fully anthropomorphize the well instead of using the furies from Web of Arachnos or similar avatars. Not only that, it hates the guys on the boxes. Recluse is a trickster and Statesman a coward, your new endgame system says, and you'll be bigger than both of them. We promise. But because of the nature of the MMO format even if you're into that kind of storytelling the best you're going to get is the Statesman or Recluse task forces, and even then they up and kill Statesman so your villain can't even get a badge for beating him up anymore. So not only is the incarnate story forcing you down an antagonistic path leading directly to the setting wiping Battalion story (and, frankly, we have Rularu at home for big diverse alien threats.) but you don't even get to be good at it. CoX as a storytelling medium was always at its best letting you build stories with its fantastic toy box, which is why its strongest storytelling is at the small to mid sized range. There's a lot of good in Going Rogue but I feel like it forgot that, lost the personal touch in the wake of Praetoria's great self destructive drama and Prime timeline's need to keep up in ways it really didn't.
So in conclusion what I'd have done with the Incarnate system, from a storytelling perspective, is cleave to the older lore. Your hero or villain reaches a Herculean level of fame and influence that is transforming them into the next stage, which'll be kept pleasantly vague, and the Well encourages this. It doesn't care how you use your powers as long as you use them in huge, epic ways, because that's how gods are made, and gods are what'll be needed for the troubles coming down the line. This ties in nicely with CoH's background storyline and could set the stage for a Rikti homeworld expansion where you challenge the true alien masters of the great invaders. Most importantly it's flexible; you can be as involved with the Well as you want because it works passively.