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Why Nintendo decided to turn down a 100% completed game loosing big bucks in the process?? Beacuse of the Nintendo sixty foouuuuur.....

The reason for non-release was the then impending Nintendo 64, which of course was intended to be released a lot sooner than it actually was. Miyamoto-san decided he wanted to have a clean break between 3D games on the SNES and 3D games on the new superior 64 bit system. In retrospect, he could have released Star Fox 2 and there would have been over a year and a half before the N64 came out. But hindsight is always 20/20.

 

Star Fox 64 incorporated a lot of the newer ideas we created in Star Fox 2 but it didn’t, in my view, take the genre a full step forward. Star Fox 2 really was a different direction of gameplay.

http://www.siliconera.com/2010/03/28/why-did-nintendo-cancel-star-fox-2/

So who knows..... maybe todays cancelled games'll turn as better version in future generations.