Loom was an attempt to push gaming forward and explore new territory, and for that it deserves commendation. But it failed in the primary goal of any storyteller, which is to make the listener/reader/participant care about what happens in the world. It was a dreary and dull experience.
From the wikipedia page, a quote from the creator of Loom:
"Contrary to popular belief, the Loom sequels were not abandoned because Loom didn't sell well. Loom has sold more than half a million copies in various formats since it was published in 1990. The reason the sequels weren't made is because I decided I wanted to work on other things, and nobody else wanted to do them, either."
The final sentence, I think, is most telling.