IMO the factors were:
1) Many people were expecting the "Richard Garriott" style of gameplay - no virtues on Tabula Rasa, just kill all the aliens!
2) It was RG's "test" game, he wants to try a new game genre.
3) They merged with NCsoft Korea, or rather, they were absorbed. Their concentration on the game got less and less because of NCsoft, their parent company.
4) And as you've said, RPG and/or FPS?
5) They relied heavily on Alpha Tester input, if you are not aware, the TR on the market right now was not the original TR design at all. Personally, I prefer the original - Sci-Fi Fantasy / Science Fantasy genre. The TR we have now is purely Sci-Fi.
I bought the Collector's Edition of TR, but I stopped after a couple of 2-digit levels (I can't remember anymore). I highly preferred the original TR. It's "Richard Garriott". This new TR isn't "RG" at all.