The book “Ponyville Confidential” talks about how those Meet the Ponies shorts were part of Hasbro’s 25th Anniversary re-tooling of G3 in 2007, when top brass decided to focus on mainly on that core of 7. Up to that point Hasbro had mostly figured that spreading the attention over more characters meant they would sell more toys.
Wondering what you mean by “twisted reputation”. G3 was specifically targeted at girls aged 3 to 7. Part of the change was how the focus went from the target group being caretakers of ponies in G1 & G2 to directly identifying with them in G3. By design, the G3 cartoons are more childish and gentle than those from G1. G4 is obviously a huge contrast and aimed at a more mature audience.
By the time G3.5 dropped, legacy MLP fans were starting to feel like it was all going down hill. The G3 toys are gorgeous. The G3.5 ones… aesthetically they leave something to be desired.