But the TV license was still a thing before we even had HD channels.
I don't think you get the point. The limit here is the bandwidth that is available. As the SD vs HD thing doesn't cost the BBC much anything different. They have a fixed badwidth to allocate between channels. It is simply a sign of priorities that they will relegate BBC News in favour of content that isn't public service.
It is indicative of the BBC at large. They have luckily been massively cut back in size over the last 10 years.
Think about how bloated they must have been at their peak income levels in 2010. Imagine if that trajectory prior to 2010 continued for another 12 years. They would probably be +50% the size they are now, producing even more non-news content to squeeze into that fixed bandwidth.
Television licensing in the United Kingdom - Wikipedia
en.wikipedia.org