Just a quick question and a theory that hinges on a certain answer to that question:
Do we know that Guardia used the Masamune in its defence? The ending FMV (and here I'm relying on YouTube, never having played PSX Trigger) seems a bit hazy on the subject. We see the "last defender" fall, but since it's just a shadow, it seems impossible to definitively ascertain the sword's identity. Thus, is it possible that Porre somehow--possibly with help from outside the flow of time--captured the Masamune and used it against Guardia? This would go a long way to explain the fall of Guardia, since the people tend to put a lot of stock in heroes and legends and things, as well as due to the power of the sword itself. Also, the slaughter of Guardian citizens--the same people it'd protected 400 years ago--would be an excellent reason for the Masamune to become corrupted & corrupting.
The last line of the FMV says that the Masamune disapeared in 1005, but doesn't necessarily state that it was in Guardia up until then.
Edit: I was reading in the 'Final wielder of the masamune" topic and found that Kyronea already proposed that the Masamune was used in Guardia's defeat. Still, that doesn't explain why it hasn't been put forth as a major reason FOR Guardia's defeat.