Part of it seems to be that the series was never something Miyamoto really put much effort into. Also add in that it doesn't style wise fit with standard Japanese popular trends and despite attempting to revamp it with a anime series (lame as it was) and the high production GC/Arcade games, the franchise never did exceptionally well on either side of the pond. The most popular aspect is Captain Falcon and a large part of that has to do with Smash Bros.
Add in the difficulty of racing games of that type in general to sell, Nintendo of Japan probably thought it would be ok to let the series fade. Not believing that the fandom attached to the game would be enough to warrant a new game like Metriod and Star Fox are bound to receive eventually.
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