I wouldn't say Zip didn't catch on, there were a few years where Zip drives were pretty ubiquitous. MD Data had a price problem. The drives were expensive ($500+) and the disks were nearly $30 IIRC. Meanwhile a Zip drives and disks were half that or less.
On the whole they just did not offer enough storage over competitors to justify their price. When CD writers got cheap they were better in almost every way.