On the scale of a single PC group, this makes perfect sense ... since the PCs are the perspective "into" the game world.
Having lots of LITTLE narratives, all competing with each other, makes plenty of sense.
Referee/player groups create these narratives. As far as I'm concerned, it is not the task of the setting designer to do so. At best, it is partially the job of the adventure designer.
My postulate is that Traveller works best when the PCs are NOT the "center of the universe" (the chosen ones, foretold by prophecy immemorial ... blah blah blah, yakkity smack) and that the PCs "have NO DESTINY to fulfill" because they are NOT the chosen ones, foretold by prophecy immemorial ... blah blah blah, skip ahead Brother Maynard.
I would argue it's not so much about destiny or prophecy, common tropes in fantasy games, but more about stakes.
It is, in my opinion, a regrettable development in popular SF (and not just SF) media that the stakes almost always have to be about the fate of the universe (the game universe, not the literal universe). For OTU-Traveller, where your typical PC group are in control of a single, comparably tiny starship and visit maybe a few dozen star systems over the course of their career (out of tens of thousands in existence), this simply doesn't work.
It's alright for there to be Epic Stuffs™ happening in the background/backdrop of YTU, but that stuff ought to remain in the background.
I now think epic events happening in the background are in fact often a hindrance. Either they don't have any influence on the PCs' lives, then they are mostly a distraction; or they do, then they can easily throw wrenches into a running campaign when mandated by the game's designers.
IMNSHO: If you want to have big, epic changes affecting your entire RPG setting, then at least have them in such a way that a normal PC group can directly(!) participate in them. If that is implausible (as it arguably is for Traveller, as I've mentioned above), then either don't have them or first expand your game in such a way that PC groups able to participate become normal.
Now, a limited, local war does not necessarily fall into this category, and I think it is perfectly fine to have something like the FFW run in the background. But ideally, in such a way that battle reports would not drown out other kinds of background information or that most of the in-game thinking would revolve on whose fleets took what.
