ORIGINAL: Briman
I would guess that their nearly complete lack of innovation had something to do with it ( except WSMs, which they seemed to go overboard with ) and the fact that they only made a few mdels for the last 40 years. Everyone and their brother already has a winchester 94, and there is no big demand for new ones, Model 70s are nice rifles, but aren't anything special when there is a dozen other companies making similar rifles, and their shotguns weren't anything special or outstanding either.
Actually, most all Winchester mechanical shotguns (omitting the SXS's, like the Model 21!!) have been rather poor. They really crapped up the Model 94 three decades ago, and with all thge similarly priced Model 70 cloneson the market, they lost their real advantage, which was the Model 70 of the pre-64 configuration. When they brought it back, more or less, it was too late. Particularly considering that the new "old" Model 70's have been plagued with quality control issues that the pre-64's didn't have!
Also, don't lose sight of the fact that USRAC was owned by an international conglomerate headquartered in continental Europe where the anti-gun mentality predominates, and it is likely those owners could have cared less if a US gunmaker went belly-up! The Brits who owned S&W a couple years back damn near did the same thing to that old outfit! The way those morons sold out to the Clinton administration was totally dishonorable, and nearly cost them all their business. We're lucky Americans reclaimed S&W in time to save it.