They did not give their customers what the customers wanted.
Basically at first rim was the only game in town. Its BB or Palm. BB did it better, cooler, CHEAPER (ish). It was perfect. Everyone who was anyone had a BB.
Now a smart company would continue the trend: Keep innovating. Look at YOUR CUSTOMERS. Where do they suffer? How to make everything better? 83XX series is a perfect example. They made a major upgrade to their os and put it on the shittiest hardware (see the $99 android tablet, thats basically the 83xx, ok the 83xx was usable). That phone was shit at best.
As a company realizing that they WILL be dethroned unless they innovate, they would have put better hardware, worked more on their platform, attracted developers, etc. App store shmapp store they coulda done SOMETHING. The blackberry world store came out AFTER the apple app store and it was a lot worse, and didn't even come pre-installed. Basically version 1 did not asynchronously fetch images, making browsing anything other than top 10 list impossible. Not to mention that what was on top 10 2 yrs ago is still there, nothing comes out for BB.
RIM is a nothing company who had a good idea. They are losing steam. They have no good hardware. They have no good software. In fact name me 1 application for the BB that is in any way exclusive to BB and is useful.
Long story short. RIM stagnated and by the time they opened their eyes, it was too late.