1. Your target audience was not small.
2. Your lack of marketing had nothing to do with your failure.
3. There is nothing wrong with your technology choice.
4. Shared hosting wasn't the cause - you just chose a bad host.
5. It's possible to gain people's trust if you position yourself correctly, if your product looks legitimate enough, if you have enough word of mouth or buzz, and if your product is just plain good.
6. Gmail didn't kill Waifmail. There is plenty of room for competition in mail.
I may be completely wrong, but from reading your post, my guess is that:
1. You gave up too quickly. 2. You weren't able to estimate what users would want correctly or at all. Or, you weren't dedicated to figuring it out. 3. You couldn't execute the idea correctly, either with design and/or code. 4. As a result of not understanding your user, you weren't able to keep innovating. 4. You weren't able to understand your user because your vision wasn't exactly right