A slew of reasons, but perhaps the biggest is just the increase of competition and particularly the monster that was the PS2 - it basically destroyed Sega and the Dreamcast, and marginalized MS and Nintendo.
You also had the lack of appealing, mass-market software. Even the great games largely tended to be niche, like the cell-shaded Zelda and the weird Mario game.
The funky console and controller design wasn't particularly appealing. Also had sort of a "cute" look that somewhat pigeonholed it as a "kiddie" console (despite having plenty of "mature" titles like the RE games and Eternal Darkness.
Lack of third party support. Although the console was actually comparable in terms of power, Nintendo negated some of this with its exclusive disk media which was quite a bit smaller than the competition in terms of space.
Not terribly well marketed
"We hold these truths to be self-evident - all men and women created by the, go-you know.. you know the thing!" - Joe Biden
