I think the increase in price was a major factor, along with poor brand mismanagement. The "Year of the Snake" releases should not cost $40-$50 more than the ones from 2 to 3 years ago, especially as they have less packaging, fewer accessories, and are generally less polished than older figures like Stalker, Beachhead, Firefly, Rock n' Roll, Viper, and Hawk. Releasing four of the five figures over a six month span didn't help either.
Why release a well received Snake Eyes statue, and then go in a totally different direction with the 1:6 figure that was both the most expensive in the line and which was competing with the Hot Toys version? Once they got their various polystone stuff going, it seemed like the unspoken message was that fans wanting the more ARAH accurate designs had to start buying dioramas, maquettes, and PFs.
The Trooper variants would have done better if they were all Blueshirts and all had their own head sculpt (or if they had done like the Ninjas and made a neutral-looking generic sculpt for all of them along with individualized "expression" portraits either included or as an Exclusive). The "Desert Officer" could have been a ARAH-accurate Blueshirt officer, and the Black Dragon Ninja could have been a Red Ninja Clan Leader (or something like that). Hard to troop build in this scale when every release has identical portraits but different uniforms.
I don't buy the linkage with Hasbro's declining interest in the Joe brand, either. The launch of the Sideshow line was almost perfectly timed with the discontinuation of the 25th Anniversary line in favor of the Rise of Cobra stuff. For me, at least, it was an easy choice to leave ROC crap on the pegs and buy Sideshow instead. If anything, Sideshow's efforts gave Hasbro some inspiration for their Pursuit of Cobra and 30th Anniv. lines. If anything, Hasbro's decision to more or less ignore the 50th Anniv. is another great opportunity for Sideshow to attract more Joe collectors. That said, it looks like they lost interest in military-themed figures. The last one they did was SDCC Lt. Falcon, which was largely a kitbash.
It was probably a decision long in the making, with "Year of the Snake" as a tool to wrap up all the stalled Joe products that were "in progress."