Backstory is a word which here means what happened before the day the Baudelaires were walking down Briny Beach. In most books, the backstory is explained as you go along. You find out what you want to know, usually when you want to know it. Not so here... at least, not so far, because in order to figure out why the Baudelaires are going through what is happening right now, we need to figure out what happened earlier. I dont think Lem wants us figuring anything out, but Im going to try anyway. Does that make sense? Good. Here goes.
(Spoilers are ahead. Beware.)
According to my research, the schism in V.F.D. happened a very long time ago, before anything else. Before, V.F.D. was exclusively dedicated to making sure the world remained quiet (and extinguished). Then, to the best of my knowledge, Count Olaf showed up. *sigh* Here we go.
Then the good guys (Beatrice, the Snickets, the Duchess of Winnipeg, and Olivia, who is not really all that good) joined V.F.D. at around the same time. Beatrice met Esmé Squalor and later stole something from her... maybe Lem or Mr. Baudelaire?
Fifteen years before the series began, Lemony Snicket and Beatrice were engaged to be married. Then, according to the Daily Punctilio, news broke of his involvement with V.F.D. and the accompanying scandal was reported in these very pages. Mr. Snicket became a fugitive from justice... Lem was fired from his job as a dramatic critic, accused of burning down the Quagmires' mansion, and forced to leave the country. He couldn't communicate with Beatrice at all, not even by telegram or carrier pigeon, and, I assume, the engagement was broken off.
Fast forward fifteen years. The Baudelaires' mansion has burned down and Count Olaf is after their money. Then Geraldine Julienne writes the article about 667 Dark Avenue, which we will later learn connects to the Baudelaire mansion through a secret passageway. Now Count Olaf isn't sure if the Baudelaire parents are indeed dead.
Remember that Masked Ball Lem talked about in The Austere Academy, right before the Quagmires put on their disguises? Well, it happened just after The Reptile Room since Lem talks about Dr. Montgomery's missing reptile collection in the R.S.V.P. he sends on page 144 of the UA. Beatrice was at the ball, even though she was supposedly dead at this point. (She's the Baudelaires' mother. More on that in the Theories section.) So, we have to conclude that Mrs. Baudelaire survived the fire and went to the Masked Ball, maybe to contact other members of V.F.D., but died afterward, if not that night.
The last thing that happens outside books one through nine is when Esmé marries Jerome Squalor because he owns the penthouse on 667 Dark Avenue. This happened after The Miserable Mill because when Jacques Snicket writes to Jerome begging him not to marry Esmé, he talks about the murder at Lucky Smells Lumbermill. (Jerome didn't even get the letter, thanks to the doorman/henchman of Count Olaf.)
Maybe this won't solve the mystery, but it does clear a lot up. Now if only we knew what happened to Quigley Quagmire...