What was wrong with it? It seems like they cared a lot about the physical experience of the cards and envelopes, for example. But maybe customers didn’t understand that or had different priorities.
It sounds like despite their reach and promotion, their sales lagged for Cards - which suggests they didn't quite get the product fit right either in cost or UX. The demand certainly was there.
I'd also say that a fancy printed card-in-envelope is sort of a weird product anyway, no matter how nice the paper is. Its naturally competing against other card-in-envelope junk in your mailbox, and while it was maybe a little bit of a novelty, I don't think I've ever personally thought "wow, this person really put effort into this" when getting a printed card. I'd much prefer something handwritten. That's why we focused on the much-cheaper postcard-style cards, which also still gave that little hit of novelty (hey, something in the mail!), without trying to be something it wasn't.