Yeah, that was my thought, too. And not to be argumentative, but "knowledgeable people" is a relative term.
I would think that somewhere, somebody did some experiments with wadcutters to determine what they do as the yardage increases. Your point about twist rate is probably part of the root cause. The nose of the wadcutter is anything but aerodynamic. My guess is at some point where the spin and the velocity hit a sweet spot, the bullet tips and after that, it's all over.
If you think about it, the attitude of the bullet is pointed slightly upward for the entire flight. The WC has a sharp edge at the nose and another at the base. This creates two different pressure areas above and below the bullet as the bullet travels thru the air. I'm not aerodynamicist. Hell, I can hardly spell it. But my thought is at some point the pressures pushing up and down at different points along the bullet length overcome the stability imposed by spin and can alter the attitude of the bullet. Once that occurs its flight path rapidly deteriorates. Here is a sketch to show you what I'm thinking. Black arrows are airflow over the bullet. Not trying to come off as one of those "knowledgeable people". Just some random thoughts on what might be going on.
And it could be that every bullet goes thru this, but the nose shape and twist rate alter the point at where this effect takes place. In talking to guys at the club that have been shooting .38-55 for many years, the lighter bullets work well up to a certain yardage, about 300 and then fall apart accuracy-wise. Could be the same thing going on, only to lesser extent due to more aerodynamic bullet shape.