A couple of decades back I was working with a former BBC broadcast engineer who'd spent most of his working life working for Eurovision and the EBU. Almost everything they did early on (back in the 50s) relied on broadcasters wanting to cooperate on the big sporting events - in particular football. It was the World Cups and then the European Cup that triggered most of the funding the technology/infrastructure jumps needed.
The Eurovision Song Contest was initially an attempt to show that the network investment wasn't just for football plus it gave them the chance to do the multi-country broadcasting thing (reading out the votes!) using relatively simple studio based setups. So if he was to believed, the Song Contest only existed because Eurovision needed something to play with that could make artistic claims about its role in promoting international cultural understanding.
The winner is more or less the original Eurovision vision - a national cultural story told to and respected by an international audience
Wrong. We don't "Pay to be in it" we pay for the bloody thing full stop.
And even if your ramblings were correct, we can't even pay to win right anyway
The big five (UK, Germany, Spain, France, Italy) are the primary fund providers through the EBU - basically because they were the biggest countries in the EBU setup, and they still provide most of the money/technical support. When the song contest got bigger, the big five decided to have automatic final places, because they were scared they'd lose funding from its primary broadcasters if they weren't appearing at its best known event!