Well MSEP was created during the Bicentennial celebration of American during the 1970's (Especially in 1977)
Not quite. DL's MSEP debuted in 1972, and was created in response to the popularity of the Electrical Water Pageant on the Seven Seas Lagoon in WDW. EWP is a series of floating barges with various water-related creatures on them; as a finale of sorts, the lights on all the barges switch over to American flags and patriotic stars.
Similar to EWP, the first incarnation of MSEP was a series of flat panels with shapes made out of lights. Most units were pulled by people, rather than being self-propelled parade floats. It also included patriotic units bringing up the rear of the parade
MSEP took a 2 year hiatus in 1975 & 1976 for the Bicentennial, when both DL and MK were running America on Parade twice daily, once by daylight and once in the evening. During this time, MSEP was rebuilt into the 3D floats that we think of today; a second version of the parade was built at the same time. The updated version premiered in DL and MK in 1977. However, the finale at that time was a disco-era collection of neon character designs in front of mirrored panels.
The neon unit only lasted 1 year in MK (where Pete's Dragon became the end of the parade) and 2 years in DL. Details are hard to come by, but I believe the To Honor America unit debuted in both parks in 1979, well after the 1976 Bicentennial fervor had died down, along with an it's a small world unit that lasted until the late 80's/early 90's (creating "a salute to all nations, but mostly America" in the immortal pre-show words of Sam Eagle). [Edit:
@Dr. Hans Reinhardt says the iasw unit coexisted with the neon one; I believe him] Eventually the small world unit was scrapped (I think DL's caught fire, not sure what happened to WDW's) and the America unit became the sole finale
And I know it's supposed to be the flag, but this is all I can ever think of when I see it coming down the street:
[Fun fact: the fireworks in the Asia scene of it's a small world holiday were taken from the To Honor America float, after it "glowed away forever", with the bulbs changed to provide more colors
]
In general, it seems like patriotic entertainment has fallen out of fashion since the end of the Cold War. It saw a resurgence following 9/11, but nothing like what was around in the 50's, 60's, and 70's. In that era, Tomorrowland was essentially a showcase for US industry, and how we were leading the way; while they focused on a variety of topics, most attractions had a distinctly patriotic subtext.
By the time EPCOT Center opened in 1982, it was still focused on large corporations in the US and their innovations, but the patriotic elements had all but disappeared and been relegated to World Showcase. It's no wonder that the flagpole at DL's Tomorrowland entrance was removed "for the grand opening ceremony" of Star Tours, only to mysteriously never return. Although these examples are specific to Disney parks, similar trends could be seen in all entertainment
[Edit: When Tokyo got their own version of MSEP in 1985, the To Honor America unit was left out for obvious reasons. Instead, iasw acted as their finale, a tradition that continues with the upgraded Dreamlights version of the parade. Strangely, their version of the Star Jets still has "USA" emblazoned on the side of the faux-Saturn V rocket, perhaps a reminder that one of the park's original intentions was to be a place where people could experience American/Western culture. This approach can be seen throughout the park, where English text comes before Japanese, even though when it was built a relatively small percentage of Japanese people spoke English
]
Ironically, the Electrical Water Pageant was only intended to be part of WDW's opening festivities, not a nightly occurrence. However, it was popular enough that they just kept running it, and it continues to run more-or-less unchanged to this day, making it Disney's longest running piece of entertainment (though many long-running shows, including the Golden Horseshoe Revue at DL and Hoop-Dee-Doo Revue at WDW's Fort Wilderness have logged more performances since they're offered more than once daily)
