1) Usenet was at one point a huge portion of internet traffic. But as the rest of the web ballooned in popularity, what was originally the big fish in a small pond became a small fish in a huge ocean. Eventually newer internet users skipped the Usenet experience entirely. And the zeitgeist went with them. People who spent time putting new information online stopped making newsgroups their first choice and started doing it on their own weblogs or on siloed websites.
2) As newsgroups hollowed out, the S/N ratio went way down. I think once they were about 30% spam, people just started giving up en masse.
There's also the contributing factor of the old ISP services dying or morphing into media providers. Usenet was dialup friendly and the old 300/600/1200/2400/4800/9600/14400/19200/38400/57600 Kbps modem-serving ISPs would advertise their Usenet feed as a perk. It was 80 character, monochrome screen friendly. Once dialup became superseded by broadband, and computers turned into media and 3d gaming devices, and Napster/Limewire/eD2k made binary distribution so much more convenient for the masses, Usenet lost its raison d'être.