I do not think you've done anything wrong. Those varieties are prone to bortrytis. And bortrytis went totally crazy in my garden too this year. There is not so much you can do about it as it is very weather dependent(especially cold and rainy). You can burn all the infected leaves and stalks and hope for the better luck next year. I have observed that some lilies which were well hidden among other plants were not hit. Try to spread them further apart from each other for next year and see if it helps. You can remove the first infected leaves at once to stop/slow down infection.

Yes, you have good ol bortrytis and it is an awful thing. : had it in one of my beds last year and it wiped out 2/3 of that bed. Make sure you get rid of all the leaves and stalks because it can spread. Of course, because the leaves feed the bulbs, here in my zone 3 garden, they didn't make it. some of the small bulblets that had not top growth yet survived and they are starting again but are really small and I have ordered new bulbs for next spring. Good luck

OK. Apparently you all think that I didn't need to dig up the bulbs. [By the way, the bulbs I dug up looked great.] Therefore, am I correct in believing that the bulbs do not transmit botrytis?
ALSO, is treating it with copper fungicide too toxic? If the copper is in the soil, will it prevent lilies from growing next year?

Really need to know answer to these questions, because as I said I already have dusted the ground with the copper after I dug up the plants. Can I plant new bulbs in the same area after I did this?

Bordeaux mix - limed copper sulfate - is a long-time treatment for this problem and is considered quite safe as long as you don't overdo the application. Which is also the correct approach to any pesticide application :-) Copper is found quite naturally in the soil, is in fact an essential plant nutrient (although typically required in rather small concentrations) and does not harm plants or soil biology unless it is applied excessively.

Various lily growers will have info available on this problem and how to treat. I've linked you to one, which happens to be a local grower and a big online lily supplier.

Here is a link that might be useful: B&D lilies - botrytis info

Thank you so much gardengal48 for the link! It was a great help. I'm sorry now that I dug up my bulbs. I am going to leave my crimson pixies alone except for treatment for the botrytis.