Here in the PNW, Pileateds are part of a much wider ecosystem. Northern Spotted owls rely on old Pileated nests for brood sites, as well as wood ducks.
Yep, those Pileateds were probably excavating a carpenter ant gallery, but it might also have been an extensive termite colony as well. Whether ants or termites, the tree was likely first damaged by wind or weather-related cause, after which a fungus probably colonized it downward. Eventually the mushroom would kill the tree. Pileateds test the tree for easy opening. Fungal-colonized wood is kind of similar to a sponge in texture. So what looks very hard and solid often isn't.
Problem is Pileateds rely on old-growth trees for food and habitat. They only create nesting holes is trees at least 3 feet in diameter at a considerable height. So while the removed snag may at one time have had a Pileated nest, that nesting site has been gone a long time now.