Hmm, Anthropic priciple?
Its clear that Paradigm is a manufactured reality, no matter how you slice it. The hint is that there is at least one higher level of reality, where Angel, Roger, and Dorothy really exist and interact.
Have you ever tried writing a self-consistent world? Science fiction writers do this all the time, with varying degrees of success. Writing a self consistent world, where charcters can interact and grow, that is stable over a long period of time is *hard*. (Instability in this case is defined as a writing a world that allows actions/events, which if they occur, will unmake the world or the reality.)
I see Angel as an asipiring writer, putting down her story in a sort of superbook, which either creates/selects a simulation of a "reality" or an actual universe. (Actually creation of a universe would be seriously at odds with everything we know about physics, however selection would not be)
Angel is trying to create a self consistent world, Paradigm, with an overwhelming power in it, the megadeuces. The power of god wielded by the hand of man. Unfortunately this seems to be unstable. Men and their passions, given overwhelming power, must sooner or later destroy their world.
Which brings me to the Anthropic principle. (Bet you were wondering when I'd get there). The Anthropic principle basically says that we exist in this universe because conditions are right for us. Angel is having trouble with the Anthropic principle for her Paradigm. And the basic problem is the very existence of megadeuces. They are a cool concept, but they totally destabilize her created world.
As Paradigm collapses into nothingness, we see higher-reality Angel looking at her screen and crying. Another failure. Perhaps she is crying for her characters, like Paradigm-Roger, whom she has grown attached to. More likely she is crying out of frustration, because her world concept is just not working. She looks like she is about to give up, when Roger walks in and convinces her to try one more time. (Just like his character in the story.)
The Anthropic principle also applies in our own universe and world. Do we ourselves have an overwhelming power, similar to the megadeuces? Yes of course we do. That power is nuclear weapons. (Perhaps we should all agree to lose the memory of this power

) Imagine a world in which anyone could have access to a nuke. We'd be lucky to survive even one day, because there are just enough madmen out there....
Nuclear weapons are but the first of a whole herd of destabilizing technologies, that mix badly with the animal passions of man. Other examples, are genetic engineering run amok, artificial intelligence run amok. Seems to me we've seen these themes in Big O as well. Paradigm basically collapses due to the existence of just two megadeuces, Big Fau, and Big O, battling for supremacy. Perhaps in her next rewrite, Angel will leave out the idea of megadeuces. (As Rogers missing Big O watch in the last scenes hints.)
Just as in the Myst stories, the power to create a new reality by describing it in a book is godlike. If such power became widely avaliable at some time in Paradigm, existence itself would fragment. This would go a long way toward explaining the Event (if it occurred) and its aftermath. The few survivors (senators) could simply mutually agree to "forget" this power (i.e. not mention it to their kids) as too dangerous.
However, perhaps they were tempted to add in a failsafe. If something happened to threaten the existence of Paradigm, they could arrange for someone to recover the memory of Reality re-writing. Something like this seems to have happened to the Paradigm Angel.