Just like with Zune, it was not part of MS strategy and therefor dropped. You need to keep working on something like this for years to make it successful. Large companies though drop products that are not a huge success after two years, associated with such products is a career killer.
[Edit] I got the Lumia to decide as a CTO at that time if we would go into Windows phones or not. I asked for more Lumias and XBox (to show cross plattform eCommerce) from MS to evangelize inside the company, but was let hung dry. So we did not support Windows phones. They never went full in.