I believe the big picture here is as follows:
Rutherford was a rabble-rouser and blowhard, a Prohibition era politician who found his calling in religion. Given his background, he set out to get as much attention as possible for his movement. Thus, he sent his followers out to announce the message door to door much like politicians of the time would go out in search of votes. This wasn't the witnessing we're accustomed to, but a much more aggressive form of preaching designed to insight passions. Witnesses of the era would set up a car with a loud speaker and blast the "Judge's" sermons outside of churches.
His view of the world and past experiences led him try to separate his religious movement as much as possible from mainstream, orthodox Christianity in an effort to garner even more attention. Thus, he instituted a strict pacifist policy, which led to many arrests and imprisonment for its members. He also poked the hornet's nest by having his followers refuse to say the pledge of allegiance during a time of heightened nationalism. Pagan origins were sought and discovered in a variety of celebrations and traditions and were accordingly outlawed. Anything that helped call attention to the movement was viewed in a favorable light.
Fast forward a few decades and Knorr takes over in the post-WWII era. Knorr was an administrator interested in growing the movement. He realized that there was no end to what could be outlawed based on the Pagan-origins excuse, but going further in that direction would hinder not aid in the growth of the movement. He also could not simply reverse Rutherford's positions without risking a schism. He decided to split the baby. The proscriptions put in place by Rutherford largely remained in place and became cemented as a part of the JW fabric, but he put an end to further restrictions. He wanted his movement to be more appealing to the masses. Therefore, when people began to notice the inherent contradiction between, for instance, wearing a wedding band but prohibiting Christmas, instead of maintaining a consistent approach, the society found a way to distinguish the two and leave wedding bands up to personal conscience but leave undisturbed their views on issues that had been banned during Rutherford's day.
There’s an inconsistent mess in place because to continue burrowing down the hole Rutherford dug would almost prevent witnesses from functioning in modern day society and Knorr wasn’t going to let that happen.
