Everyone's pointed to a lot of good reasons.
I chalk it up as a fad that came and went. That's not to say they'll go away, but it's not "hot" anymore also because they were not able to capitalize and keep up with the pace of technology and the needs of enthusiasts.
The Shuttle cases, motherboards, and PSUs being proprietary and unswappable became a major hindrance. You couldn't match the case you want with the motherboard you want, with the power supply you need. You have to take the prefab models they offer, and they all seemed to result in one compromise or another. (for example a dual-slot GPU means using on-board audio. The case you want doesn't come with a powerful enough PSU for your GPU, or maybe the MB only has integrated graphics. Want a silver AM2 case? You might be SOL. etc. ad nauseam.)
If they would have settled on layout standards for their MBs, cases, and PSUs to allow better customization it might have turned out a bit better. Rather, they are still constantly tweaking everything.
I loved my Shuttles, but they don't seem practical any longer. They were also almost the the only SFF's I thought were attractive looking. But as an enthusiast system builder, I want what I want without compromise on the inside too.
The price increases didn't really help either, but I'm happy to pay for something I want. I won't pay for a sacrifice.