>>38493235Blue got knocked from his champion position by Red. Then all of a sudden Red vanished, fleeing to Mt Silver. Since he was gone, nobody could battle him to claim the champion spot back. I'm assuming since Lance was already part of the league's elite 4, it was easier for him to take over the role.
>>38493920This is also kinda my reasoning too. Maybe they offered Blue to challenge Lance to see who could be champion again, but his defeat with Red humbled him enough to settle with being a gym leader. (Which is still a very high position)