I can think of several things that may have contributed. In no particular order.

* Their application business lost out to Microsoft many times over the years. (Sidekick, Quattro, Sprint, etc.)

* The availability of free and open source development tools went way up. (This undermined the ability to make money selling development tools, even as they become more expensive to develop.)

* They lost Anders Hejlsberg to Microsoft. (His Microsoft resume is a testimonial to his skills, technical and otherwise, but prior to that he was the driving force for the Turbo Pascal line through Delphi. They did diversify, but Turbo Pascal really was Borland's core asset.)

* Developer mindshare pivoted away from client apps to web apps.