Sure they did. Major League baseball never should have expanded or been allowed to extend beyond St. Louis West or Cincinnati South. Baseball was a lot more interesting with National and American League teams in the same city than with divisions, play-offs and inter-league play. The integrity and purity of the game was sorely compromised.
I certainly hope you are kidding with that assertion.
The northeastern focus of baseball was a result of pre-World War II demographics, transportation modes, and communications. All of those factors saw major changes after 1945. Such condensed leagues would have lost national relevance had they not expanded southward and westward.
Once consequence of a reluctance to expand actually almost happened: The proposed creation of a THIRD major league, namely the Continental League in the 1950's, which would have filled markets not served by the AL and NL. The threat of such a league helped force expansion by the existing leagues, and the Continental League faded into one of history's "what ifs."
Something similar helped force the NHL's expansion in the 1960's. The old Western Hockey League, which included teams in Los Angeles, San Francisco, and Seattle, and featured a high level of play, made noise about expanding into a nationwide league, potentially squeezing the NHL. The NHL embarked on several waves of expansion, and the WHL eventually faded into history.
And New York had two major league teams. Brooklyn had one.
Last I checked Brooklyn was part of NYC, though I understand the pride of that identity. But using your logic, Brooklyn had one team, the Bronx also had one team, and Manhattan had one team.