Ah, so it is the war specifically that you are referring to.
It could not have been settled between the two families, in fact the families did not matter, the dispute was the pretext so as to ensure the destruction, Krishna simply engineered the circumstances but even then he left the freedom to choose (Duryodhan, Karna, Bhishma, Drona, Dhritarashtra could have each in their individual capacities averted the war).
That is the whole point, it is not supposed to be any better today, just as the devastation brought about by Vishnu when he manifested as Matsya did not end adharma or the ills of the world. You could equally ask, why was the deluge required, could it not have been settled any other way, after all despite the deluge and the astronomical loss of life it caused adharma still rose soon after. Because that is what the Lord offers, a reset followed by a respite as the progression of the yugas continue (and said progression necessitates the cyclic nature of the rise and decline of Dharma in practice itself). The verse of the Geeta presupposes just that, that after EVERY intervention the lessons will be forgotten and so here we are, unmindful of the lessons of the last intervention and paving the path for the next.
After the Mahabharat war concluded Parikshit was followed by 23 kings in the Kuru line, and the epic states that they ruled in relative peace and prosperity, this despite the fact that all of them reigned in the Kalyug, THAT was the respite before the conditions prevalent in the Kalyug truly took hold.
Sans said respite the land of Bharat would have disintegrated long before any conqueror ever set foot on this land, our best preserved links to the culture ancient would be forged within this period of respite so that something, even the tiniest fraction of the tiniest fraction of what was would be preserved even within the Kalyug, so that there would still be dharma left for those who would endeavor to adhere to it even in the most desperate of times no matter how difficult and slight such an avenue would be, it would preserve that one last path through which all may be remembered again, albeit an astronomically difficult path it maybe to tread, Krishna/Vishnu preserves Indrani and so he did preserve said path for those who would follow even in the last and darkest of yug.
ALSO, WE SHOULD REALLY TAKE THIS DISCUSSION OF THIS THREAD, WE'RE GOING WAY OT!