So now my biggest guilt is not feeling as lost as I think I should feel.
What you describe here is called "survivor's guilt".
The true test of the validity of your apparent guilt is how your wife's reactive interaction plays out between other residents in the care facility she now lives in.
As you said, she is happy now.. more happy than when she was at home with you. Don't worry, it was probably just the house she was bored with, not you.
Keep the following in mind though... where your "survivor's guilt" would suddenly disappear however, is if your wife's interaction with others became hell on earth for all concerned, which means you'd be inclined to take her back home with you ...and for a while if you did that, you would actually feel justified in returning her to your house for you to resume her care duties... until you burnt out and she outlived you.
Your wife is moving on. She has risen to another level in her own evolution (which is not to mean 'apparent decline'), which means you cannot interact with her in ways that you both knew from 50 years of marriage.
Where she is now is that place where neither of you have anything meaningful in common anymore, mainly because she doesn't remember her past. What this means of course, is that your wife is no longer the woman you married because she evolved into someone whom you no longer recognize, nor does she recognize you either.
In a sense, all of that is a blessing in disguise, which means both of you can now move on with the evolution of your own individual lives without feeling the need for asking permission from each other to evolve without the other at hand.
You and your wife have not arrived at a 'T' intersection in your paths, you have arrived at a 'Y' intersection.
As you both slowly diverge from each other on your respective paths in your evolutions, for a time you will both have each other in sight as those paths continue to diverge further apart, yet know that you are not walking in opposite directions away from each other. This is not divorce you're experiencing, this is evolution at the soul level and it took your wife's dementia to bring this apparent evolution to fruition for BOTH of you.
You will remain available to her as her Power of Attorney, but you're no longer available to her as a husband, confidante or her primary caregiver.
You now need to go find that place along path behind you where you dropped yourself off about 10 years ago, then give yourself a de-briefing, forgive yourself for what you thought you did or didn't do ..and then be grateful as hell that you can start a new life with no strings attached and no explanations required to anyone.
You are now embarking on 'YOU 2.0'!
