"Also, why did Rome do away with such practices as giving the chalice to the laity and infant communion (as well as immersion baptism)? "

Poor pastoral assumptions in the Middle Ages, derived from an excessive clericialization of the Church and the desire to avoid profanation of the Eucharist by allowing the laity to get too close to it. Taft covers most of this in "Liturgy in the Life of the Church".

"Would not it have been better in the long run if the RCC had kept these traditions so as not to create a bigger gap between East and West, as well as add more fuel to the fires of the Reformation?"

Yes, but you are thinking anachronistically. The West simply did not take Eastern practices into consideration, and besides, the Reformation was a good three hundred years down the road from the Fourth Lateran Council.

As Father Taft says, "Church history sets theology free".