I mentioned this in my comment. As a technical matter, you could simply not take binaries. But as a commercial matter, you could not; if you didn't have binary groups, you weren't offering real Usenet (and if your binary feeds weren't ultra-reliable, you were offering shitty Usenet). The result was a consolidation of the platform down to a small number of providers willing to invest large amounts of resources to placate binaries users.

If lots of people aren't running NNTP servers, there's not much reason to use Usenet. By the time Reddit and Digg rolled in, it was no contest.