People were making colonies in 2006. (That's when I started, so I don't know about 2005.) Remember Kycyell, the Talerium/Minas Ithil colony in Wayburg? I also remember taking part in a different colony effort down in Abington lands, that didn't even finish running. So, that's two colonies off the top of my head, on Atamara, without even really trying to search. I have no idea about BT or FEI, since I wasn't on either one until later. (Much later for FEI.)
However, that kind of thing just doesn't happen anymore. Ask any ruler character in the game, and the answer will be: We don't have enough nobles to start a new colony. So, how will lowering noble count help us found more colonies, or allow us to TO/Secede more duchies?
And if you reduce the noble count, a higher percentage of the remaining nobles will hold lordship, duchies, and council positions. So where's the incentive to split away to hold a council position? Drop the noble count, and you have less competition for the available ones.
Dropping the noble count also reduces the ability of all realms to hold land. Not just the current realms, but the theoretical new realms as well. So, you start a new realm by, what, seceding a duchy? So you have the city and maybe two regions. And you have 8 nobles. Now what? Go to war to conquer more regions? Where are you going to get the nobles to control the land? Your new realm will fall apart even faster than the one you left. And since realms won't be able to support their existing land, which is what you're claiming is going to force them to fall apart to allow for more realms to be formed, they will have zero incentive to go to war. They'll be too busy trying to hold together what they already have to worry about their neighbors. This is what happened on Dwilight for pretty much most of two years. No one could really contemplate an actual war, because we were all too busy just trying to survive.
Sorry, but I completely, 100% disagree with your claims here. Dropping noble count to the point where realms start to fall apart would be a complete, unmitigated disaster. We need a higher noble density to drive up competition for positions, thus creating additional incentive for forming new realms with new positions, and allow for the existing realms to try new things, like colonies and TO/Secede new realms.
Edit: I just checked the wiki regarding a different one I seemed to remember: Drachenwald, a Darkan colony in Tarasac in mid-2005. So that's two actual colonies TOs that succeeded, and a third that failed, in 2005/2006 timeframe, on AT alone.