You're on the right track - oil breakdown due to overtemp is a symptom, not the cause. Those temps you indicate are a bit (to way) on the high side, but you've related the reason - the need for oil to cool the lower end of the engine.
An internal-combustion engine lube is tasked with the following:
Lubricate
Cool
Seal
Clean
Protect
The main cause of engine failure is heat (shut off the lube flow, the bearings spin - because the heat welds the crank to the babbitt). Lubrication prevents heat from friction. Cooling removes heat from areas where otherwise it would accumulate. Sealing prevents blow-by and increases engine efficiency. Cleaning keeps all of the first three working as they should. Protection keeps condensation in the engine from corroding expensive parts.