Instead of being scrappy and trying to do whatever it took to gain marketshare in an area they were behind in they put a ton of limitations on their platform and it tanked adoption because the people who were willing to switch and try something new were by definition people who were going to be frustrated with this behavior.
Things like not supporting multitasking or apps running in the background, blocking all exes from even being downloaded, not giving access to the underlaying file system, categorically blocking applications like video game emulators, restricting the ability to tether your phone, etc.
Yes there wasn't third-party app support and yes their maps sucked but I think both of those would have been fixed over time if they didn't take a super arrogant big brother approach to the operating system.
Example of what I'm talking about: http://i.imgur.com/JfFiuO4.png