Exactly the business model wasn't strong enough, just upselling templates for hundreds of dollars which AI can churn in few tokens was easy to disrupt.
This has nothing to do with the actual facts or arguments of the case. Our "Justice" system has openly and capriciously emphasized corporate rights over individual rights for at least 50 years now.
Copyright is evil. Disliking LLMs doesn't change that.
Not stuff like shadcn and Tailwind Catalyst, but a proper versioned, tightly coupled UI library with rich theming capabilities made for the 99% of users who aren't skilled enough at design to be cobbling together their own design systems or editing a Button component directly.
Instead they rode the wave (despite being best positioned to redirect the wave) and they're paying the price.
If it wasn't AI it'd be the first version of MUI that moves on from Material Design 2 as a default. Or Hero UI v3. Or literally anyone who brings sanity back to the space of component libraries and leaves "copy and paste code snippets" behind
HeroUI faces the same problem, and now their React Native library includes an optional (paid) conpiler solution that makes it faster.
MUI has the same problem but besides templates they have their MUI X data components which aren't limited in complexity to what can be ergonomically copy and pasted to a clipboard.
Some people who would buy the higher quality templates don't know that they exist now.
But the broader, more important point: an open source project previously could be funded by using attention to sell other services or add-ons. But that model might be gone if users no longer visit or know the creators.