It was an ambitious experiment to create another, high-paying venue for short SF/F fiction. They gave it four years.
But it never quite reached the level necessary.
I'm afraid I'm not particularly surprised. It's not a real blow for me -- I don't write short stories, really -- but for those who aren't writing in the novel category this could hurt. There just aren't that many worthwhile venues available, and those that exist are getting more pinched. I wouldn't be surprised if, by the time I'm 60, all of the SF magazines are gone.