- it was owned and controlled by a single company and thus a target for other companies instead of other companies helping to improve it
- that single company was unable or unwilling to fix security holes in the sandbox and browser makers eventually got fed up with that
- while there were some ways to interact with the underlying browser environment, ultimately a Flash instance lived in its own little bubble, creating usability problems
Putting the HTML+CSS layout engine into a separate module doesn't mean that it wouldn't remain the standard way of doing document-layouts on the web, it would just mean that higher-level solutions wouldn't need to use hacks and workarounds to map their concepts to HTML+CSS (same way as Javascript had to be used as a less-than-perfect compile target before WASM because it was the only option to run code in a browser).