Because the maneuver the kite must fly is very dynamic (always turning, but not at constant rates), control with feedback alone would lead to pretty sloppy flight, since feedback requires an error to develop before the system can respond to it. Good feed-forward was crucial to flying well; from the desired flight path, wind speed/direction, and desired aerodynamic quantities (airspeed, angle of attack, and angle of sideslip), we could compute the required rates and feed-forward actuator displacements needed to execute the trajectory.
For more details, check out my paper titled "The Makani Autopilot: A Critical Retrospective", available here: https://storage.googleapis.com/x-prod.appspot.com/files/Maka...
I was terribly disappointed the project was shutdown. The engineering problems were unique and challenging. And the team was absolutely world class.
I felt like we could do it. And I wish we were still at it. But that's purely from the technical side. I wasn't involved in things like budget, and whether it would be economically viable.
There are airborne wind turbine concepts that use an aerostat (blimp/balloon). However, these suffer from at least two effects: (1) the largest practical turbine aperture is quite limited, and (2) the drag of the turbine will push the whole balloon/turbine contraption downwind and downward.