The cutting off of the power level is one of the best things about Dragon Blooded Exalted campaigns. It's why I'm signing on to play a Lookshy game even though I hate Lookshy with a fiery burning passion. *grins*
Now of course, this is completely unrelated to why games fail, but I'll talk a little about what the celestial game looks like, and how it impacts the dragon blooded game.
When you're playing with Celestial Exalted, there's pretty much one optimal build, often referred to as "Jon Chung's Silver Hammer" You play a character with a grand goremaul, an extra action charm, and a perfect defense. The grand goremaul is a weapon so powerful it usually kills in one hit, but is restricted to one attack per action. The extra action charm enables you to spam this thing and be sure it gets through, while the perfect defense goes into a combo with the extra action charm to perfect away any attack that comes at the hammermonkey.
When taken to it's inevitable conclusion, large numbers of characters playing with silver hammer builds get into a situation where if you don't pop a combo that includes a perfect defense while fighting celestial exalted (or any cutter with a grand goremaul and an extra action charm really), you die. Taken a bit further than that, this leads to what people call "Paranoia Exalted" where characters never ever use a charm that isn't combo OK in combat, and die if they can't confirm enough +2 stunts. If paranoia exalted goes further, characters begin to fear their own shadows, and start including the other tiers of a paranoia defense; a "flurry breaker" and a "suprise negator." A flurry breaker is a charm that allows a character to move away from an attacker as a counterattack, which limits the number of times the character can be attacked, and helps shut down Jon Chung's silver hammer, hopefully saving many motes on defense. A suprise negator, meanwhile, enables a character to avoid being hit by a suprise attack, and losing their DV and ability to perfect the attack. When the three elements of flurry breaker, suprise negator, and perfect defense are combined into one combo, it becomes a three tier "Paranoia Combo." A player playing paranoia exalted will include these three charms in all of his combos, which he will have for every charm he intends to use in a situation he feels is even slightly dangerous.
Now, for dragon blooded, an imperfect version of Jon Chung's Silver hammer can be created by taking the charm "Ringing Anvil Onslaught" and weilding a grand goremaul. Since Dragon Bloods don't have easy access to perfect defenses, this build can be extremely deadly. With Earth Dragon Form and perfected kata bracers, such a character can essentially kill any dragon blood in creation without perfect defenses comboed to flurry breakers with impunity, provided she wins the join battle roll.
Dragon Blooded have access to an imperfect flurry breaker in hopping firecracker evasion, though successfully using it relies on your opponent not having speed enhancing charms active and successfully dodging the first strike. This, of course, is much much easier if your GM is generous, lenient with, or ignorant of the DV cap rule. (about which I will say nothing more) They also have access to an almost useless suprise negator in all encompassing earth sense, and a much better but expensive one in Tiger and Bear Awareness. Taken together with a Dragon Blood's chunky perfect defense, a Dragon Blood can put together a chunky three tier paranoia combo at about 60-90xp. Because of the mass resource drain, I beleive one conclusion is more or less inevitable:
Optimization in a Dragon Blooded Game: Just Say No.
(also, GM's, say no to any player who hands you a character with a large piercing weapon and an extra action charm. That way lies madness.)