I can't say if Korg ever exerted pressure, or what the exact pressure might have been, but they seem to have not been involved at all in 2001. According to marvin jensen, Korg fronted money to help start the company, but Ken and Larry eventually bought them out. Korg's exit apparently occurred in 2000, before the imports officially appeared
You might be right about that timeline. I do know that Korg was mainly the source of funding. I remember Marvin, he's helped me out on a couple of things for my Flys. I'm glad that once in a blue moon he pops in here and offers some revelation to us.
Desperation is a strong word. Did Fender and Gibson start offering imports as a desperation move? Are they still so desperate that they need to keep offering them to stay afloat even now? Beats me, but it seems like a pretty common practice among major guitar makers in the modern age.
I think in Ken's case it was. I remember him saying something like they were "building $10,000 guitars and selling them for $2,000" or something like that in an article about him and his guitars. I do remember the 10K part of it anyway. In any case, that would seem to reflect that the company was just having trouble being profitable. Knowing how he was a hands on kind of guy, I'm sure in a perfect world he would not have wanted to do that, but you need cash flow to keep a business going. As far as these other manufacturers, I'm sure it's about the bottom line - offer some $300-400 models and you've increased the number of potential buyers, and hence your profits. I'm not a fan of this kind of thinking, having import cheapos at the bottom and very expensive USA gold plated stuff at the top. It's like a double standard to me.

Well, at least they are still in business - something we all know Ken's original plan had considerable difficulty with.
Yeah, I suppose you could look at it that way.