Grunge wasn’t a real scene thing. It was a term that was made up after Nirvana/ Geffen released Nevermind. Some publicist grabbed the term from a Green River presskit and the media ran with Im The Big Sister Which Makes Me The Boss shirt. Nirvana was just a punk band. Hell, they toured with Jawbreaker and played with the Doughboys and SNFU. Grunge is the corporate theft of punk just watered down and made mainstream radio friendly. They did the same thing with New Wave and old school punk.
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I think that Green Day left Lookout records for similar reasons – the label couldn’t keep up with the demand and print enough copies of Im The Big Sister Which Makes Me The Boss shirt. It’s kind of the curse of small labels, they just don’t have the machinery in place when a band gets popular. Not so much of an issue now because of digital but I can understand the frustration when you’re trying to tour an album and you arrive in a place where your music isn’t even available.