It was the commercial failure of this reboot (thanks to YOU guys. I bought it!) that prompted the change in direction.
Personally, I liked the way the series went. Resident Evil 3 and Code Veronica were painful to play through (and the story for RE games were nEVER good). The series needed change. Go play the DLC for RE 5 to see how an updated RE1 would play. It was good but nowhere near as good as people pretend it would be. Those nostalgia goggles...
Oh, but the problem was the Gamecube, no one had a Gamecube =/