Here’s my stab at answering some of these questions.
After breaking away from USAC in the early 1980s, by the early 1990s Championship Auto Racing Teams (CART) had become one of the top auto racing series in the world. Unlike any other series, it raced on an interesting mixture of oval tracks, road courses, and street courses, and its drivers were among the best and most famous in the world, including, for instance, Mario Andretti. The series was owned and operated by the car owners, including people like Roger Penske.
The owner of the Indianapolis Motor Speedway, Tony George, was unhappy that “his” race, which was by far the most popular and well-attended race in the series, was not a more prominent attraction in in the schedule, and that he didn’t have as much influence in the running of the rest of the series as he thought he should. So he took his ball and went home.
He announced in 1995 that he was forming the Indy Racing League, to start in 1996, the centerpiece of which would be the Indianapolis 500. It would be the last race in the season, although it would continue to be run on its traditional date: Memorial Day weekend. This created an unusual schedule that began in June and ended in May, with a long winter hiatus. (Needless to say, this odd plan didn’t last long.)
Tony positioned this series as intended to lower costs and to attract more American drivers, although most CART fans felt that this was just a cover for a power grab by George.
At first, most of the best teams remained with CART, and the first season of IRL was a rather embarrassing mix of CART back-markers, has-beens, and never-wases. Attendance for the 1996 Indianapolis was much lower than it had been in decades, in part because CART decided to run a competing 500-mile race the same day in Michigan. (I was there.) Many in the racing community feel that the winners of the Indianapolis 500 in 1996 and for the next few years should have asterisks next to their names, because the field simply didn’t have the quality of driver that had marked all previous 500s.
The split was pretty bad for everyone, particularly fans and sponsors. For the most part, fans had not been calling for an ovals-only series or for more American and fewer foreign drivers. The quality of racing in the early IRL was laughable, and although it improved over time, the quality of racing in IRL and Champ Cars today is arguably worse than that of the golden age of CART. Sponsors, who only wanted to reach as many potential customers as they could were faced with choosing between one of two series, neither of which attracted the audiences that CART had reached at its peak.
Over the years, for a variety of reasons, mostly having to do with sponsors and money, teams started moving from CART to IRL and in the last few years the tables have turned. The best drivers, and the best racing, are now in IRL.
There have been talks about trying to reunify the two series, both of which have suffered by trying to appeal to the same sponsors, manufacturers, and fans, and most fans I talk to, and a lot of commentators, drivers, and others would like see it happen. But the powers at the top remain stubborn and unwilling to compromise.
BTW, CART is no more. The original CART organization (which was briefly a publicly traded company) went bankrupt a few years ago, and the franchise was bought by a group of team owners and renamed the Champ Car World Series (CCWS).
NASCAR was already building in popularity in the early 1990s, but the CART/IRL split only helped NASCAR by fracturing a previously unified open-wheel fanbase. If there had been no split, CART might have been able to challenge NASCAR for some of the ad revenues, television deals, and fan interest that ultimately went to NASCAR. It wouldn’t have been easy since NASCAR has several different series and a lot more races per week, but the split certainly played into NASCAR’s hands.
A few have, although it is becoming increasingly rare. In the golden age of the 1960s, drivers like Mario Andretti and others did routinely cross over, although even then it was relatively rare. Although the cars and tracks are very different, the basic skillset is relatively similar, and IMHO, the top drivers in NASCAR, F1, or the open wheel series could probably be competitive in another series if given a chance.
A few years ago, the Speed Channel arranged for Juan Pablo Montoya (then in F1) and Jeff Gordon (a top NASCAR driver) to trade cars in a test run at Indianapolis. I was no more surprised that Montoya did well in the NASCAR car than I would have been to learn that an F-16 pilot could fly a Piper Cub. But I was really shocked to see that after just a few laps in the high-tech F1 car, Gordon was doing laps within a second of Montoya’s time. Very impressive, and indicative of Gordon’s great talent.
The obstacles to crossing over are mostly financial. Pure driving talent is far from the only thing needed to succeed in pro racing these days. Sponsors need a telegenic personality to represent their products and once a sponsor takes on a driver, the driver would be crazy to give that up to run in a different series that his sponsor doesn’t support.
As others have explained, no. NASCAR and F1 are the two most popular franchises, but there’s a lot of other racing going on.