Tire Problems and What to Upgrade To?

You are right to replace them, the tread belt is separating from the carcass and expanding. On my last trailer I had an identical problem with all 4 Maxxis load range E tires that were 3-1/2 yrs old. So, even the best ST tires are not that great. I also thought the problem was with the suspension initially, but realized it wasn't since the tire was expanding side-ways as well.

One more point, if you are towing nose high, then you have reduced clearance on the rear tires and contact over bumps and potholes could accelerate tire damage resulting in pre-mature failure.