From the comments at Coppola Comment, h/t @johnb78:
The reason for the polarisation was a cycle of one side aggravating the other and vice versa.
The DUP would say or do something obnoxious to spite SF, this would annoy Nationalists and make them more inclined to support SF. This in turn made Unionist voters angry that IRA members were getting support, so they would give more votes to the DUP to put the Shinners in their place.
After several cycles of this, the UUP and the SDLP were ground down. The Brexit vote opened up constitutional issues, which has turned every vote into a proxy border poll, which further incentivises people to vote for hardline parties.
A further structural incentive was the fact the largest party gets to be first minister. This was the result of a SF-DUP deal back in 2006. This lets the DUP prey on unionist fears of an SF FM to ensure that Unionists voted for them for fear of splitting the vote and letting SF slip through. Of course, this makes Nationalists angry and inclined to vote SF, in turn giving the DUP a boogeyman to get more votes.
SF are facilitating this polarisation so Catholics end up filled with resentment. SF are now an extremely powerful party within the context of NI, so this strategy was successful in narrow terms.
* Indian Bicycle Marketing is a tactic where competing producers of more or less identical products agree to carve up a market between themselves.
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