I think it was a combination of things. If I remember correctly, AIM was an AOL subscription exclusive in the beginning so only the dopes on there were using it. The cool kids were on ICQ and I think there were very few AOL users willing or able to use a separate chat client.

Anyway, AOL eventually opened up AIM to everyone and people started using it. It was easier. AIM used screennames. ICQ was cool because you could use any name you wanted but the actual user id was an 8 or 9 digit number (mine was 36915037- not sure why I remember that). It was a total pain in the ass when you wanted to add people to your friend list. Plus, on ICQ you had to receive approval from a user to add them to your buddy list and on AIM you could just add people. Sometimes, you'd sit there in pending approval purgatory wondering if you added the right person with those crazy user id's. AIM was just plain easier.

ICQ had more features and more users, but it was just easier for a lot of them to use AIM so they could chat with their dopey friends who were still using AOL. Meanwhile, AIM was updated with new features frequently and marketed heavily. ICQ still remained relatively popular, but they really sat on their asses over there. After a while AIM caught up and even experimented with video and voice chat while ICQ stayed the same for years.

Eventually, AOL purchased ICQ and basically put it out to pasture. Still, it managed to stick around for a long time. I'm not sure they were expecting that. It's the technology that just won't die.