South Africa hardly played SL at home. That would have dented that ratio big time during that period. SAF were woeful against spin and SL had a solid spin bowling department then. I could say the same about 1999 WC, if it was in sub continent, either Pakistan or Sri Lanka would have won that.
Initial post is about Australia being able to field 2 sides better than any other country. For half of a decade, they could not even field a single side who was capable of it. The late 90s two dominant sides were SL and SAF.
Ignoring the fact that we're now talking about ODIs when the topic was tests, it's a huge stretch to suggest that Sri Lanka were dominant in the late 90s. They were dominant at home in the mid 90s, but they didn't travel that well IMO.
Let's look at their record in the late 90s:
https://stats.espncricinfo.com/ci/e...1996;spanval1=span;template=results;type=team
Including their home world cup win in the stats and they had a win/loss ratio of 1.22. That's hardly great for a dominant side. Pakistan in the period had a ratio of 1.29, Australia had a ratio of 1.39. South Africa had a ratio of a whopping 3.67.
Drilling down into Sri Lanka's late 90s results specifically we get this:
https://stats.espncricinfo.com/ci/e...1996;spanval1=span;template=results;type=team
They were dominant in Asia, particularly at home in Sri Lanka. But even that is misleading.
Home record:
https://stats.espncricinfo.com/ci/e...1996;spanval1=span;template=results;type=team
As you say, they never hosted South Africa. In addition to that, they went 3-2 against Australia, which is hardly the mark of dominance - it's the sign of two well matched sides. They also went 8-3 against India (who were pretty rubbish in the 90s). The only other non minnows they faced were Pakistan once and New Zealand twice. Really all you can say from their home record at the time was that they were much stronger at home than India and minnows.
Going back to their overall record in the late 90s, Sri Lanka had a 0.94 win/loss ratio away from home and 0.85 at neutral venues. You can't be dominant if you lose more than you win away from home.
Looking at the country by country stats, Sri Lanka had positive win rates against Pakistan, India, Zimbabwe and New Zealand, were even against the West Indies and were negative against Australia, England and South Africa. Sri Lanka in the late 90s were decidedly middle of the pack.
On average, Sri Lanka were a much stronger side between 00 and 09 than they were between 96 and 99, despite not winning a cup during the era:
https://stats.espncricinfo.com/ci/e...2000;spanval2=span;template=results;type=team
Really, Sri Lanka got lucky in 96 and unlucky in 07. They were a side who excelled only in home conditions in 96, which is when the world cup happened to land on their doorstep and got a win over a side who they had been fairly evenly matched with to that point. They were a much better all conditions side in 07 who happened to run into the greatest ODI side ever assembled *and* got unlucky in the final.