Vanilla Balance Mod v1.1 and v1.2 released!

[Byzantine Emperor]

I used 1.2 with Player1's bugfixer. Would that change my outcome over yours?

[Barbarossa82]

It could do. VBM was designed and tested for 1.5, so I don't really know what different outcomes would be experienced with different versions. However, I wouldn't say that the outcome you observed is impossible with a properly functioning version of the mod, the aim wasn't to simply replace old superpowers with new ones but to try to diversify which powers would end up supreme.
The main determnining factor with the Seleucids seems to be how Pontus fares. If Pontic expansion stalls and they fail to take over Ancyra and Nicomedia early, the Seleucids will now become a megapower and trash Egypt. If on the other hand Pontus and Armenia get their act together early and mount powerful attacks on the Seleucids, then they will still go into collapse (although it normally takes considerably longer under VBM than under pure vanilla).
At least in your campaign there was still some variety in the middle east, since the Ptolemies have only absorbed two Seleucid provinces and Armenia and Pontus are both expanding.